https://www.taxtmi.com/article/detailed?id=16216 Loan waiver taxability depends on the character and purpose of the borrowing. Interest waived on an amount earlier debited to profit and loss account is treated as income in the year of waiver, while interest capitalised and written off against the asset value is treated as a capital receipt. For the principal amount, the purpose test governs tax treatment: waiver of working capital or day-to-day business borrowing is a revenue receipt, whereas waiver of a loan taken on capital account for acquisition or expansion of assets is a capital receipt. en-us Thu, 16 Apr 2026 08:34:44 +0530 Thu, 16 Apr 2026 08:34:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/article/detailed?id=16216 Loan waiver taxability depends on the character and purpose of the borrowing. Interest waived on an amount earlier debited to profit and loss account is treated as income in the year of waiver, while interest capitalised and written off against the asset value is treated as a capital receipt. For the principal amount, the purpose test governs tax treatment: waiver of working capital or day-to-day business borrowing is a revenue receipt, whereas waiver of a loan taken on capital account for acquisition or expansion of assets is a capital receipt. Articles Income Tax Thu, 16 Apr 2026 08:34:44 +0530 https://www.taxtmi.com/article/detailed?id=16216