Provision for bad and doubtful debts limit increased, expanding allowable bank deduction for relevant assessment years.
The amendment raises the deduction ceiling for provision for bad and doubtful debts under section 36(1)(viia)(a) from seven and one-half per cent to eight and one-half per cent of total income (computed before deductions under the clause and Chapter VIA), while retaining the separate ten per cent cap linked to aggregate average advances of rural branches; it applies to specified scheduled, non-scheduled and cooperative banks and takes effect from 1 April 2018 for assessment year 2018-19 onward.