Deduction for Actual Bad Debts Written Off - (New) Section 31(2) and (3) / (Old) Section 36(1)(vii)

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.... as irrecoverable in the accounts of the assessee, shall be allowed as deduction in computation of income chargeable under section 26, subject to the following conditions (a) Debt must be recognized: • Either: • Already included in income of the assessee of the tax year in which it is written off, or any earlier tax year OR • the money lent in the ord....

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....out recording it in the accounts, • shall be allowed as a deduction in computing the income of the assessee of the tax year in which it becomes irrecoverable and such bad debt or part of it shall be deemed to be written off as irrecoverable in the accounts for the purposes of section 31(2). Under Section 36(1)(vii) of the Income Tax Act, 1961 [ Upto 31.03.2026 ] A bad ....

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....me bad/ irrecoverable, it is enough that bad debts is written off in the books of account • Bad debts is allowed as deduction only in the year in which they become irrecoverable  • Following conditions must be satisfied for allowance of a debt as bad debt: • It must be a debt • such debt must be revenue in nature • such debt mus....