Recovery of bad debts previously allowed - (New) Section 38(1)(d) / (Old) Section 41(4)

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....arlier and later recovered: • The recovered amount (to the extent it exceeds the non-allowed portion) is treated as business income. • Which is taxable in the tax year in which recovery is made. • Set-off of Unabsorbed Loss After Discontinuance of Business [ Section 38(3) ] • The provision applies only when the business/profession has alr....

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....red on such debt is greater than the difference between the debt and the deduction so allowed, the excess realization is chargeable to tax as business income of the year in which the debt is recovered. NOTE:- • It is immaterial whether the business of the assessee is in existence or not during the previous year in which recovery is made. Under Section 41(4), the relevant criterion ....