NO TAX DEDUCTION ON BAD DEBT PROVISIONING: SUPREME COURT

The Supreme Court has ruled that provisioning for bad debt cannot be considered for deduction against the taxable income. The Supreme Court’s decision pertains to a company following the Minimum Alternate Tax (MAT) under Section 115JA of the Income Tax Act, 1961. According to the judgement, a provision for liability will be eligible for deduction from the taxable income and not a provision for bad debt.