Biren discontinued wholesale trade in medicines from 1st July, 2016. He recovered ₹ 1,50,000 in October 2020 being a bad debt which was written-off and allowed in assessment year 2017-2018. He has, eligible brought forward business loss of wholesale trade in medicines of ₹ 1,70,000. The consequence of bad debt recovery is that –
A. It is chargeable to tax
B. It is eligible for set-off against brought forward business loss
C. The brought forward business loss is taxable now
D. 50% of the amount recovered now is taxable
Answer:B
Biren discontinued wholesale trade in medicines from 1st July, 2016. He recovered ₹ 1,50,000 in October 2020 being a bad debt which was written-off and allowed in assessment year 2017-2018. He has, eligible brought forward business loss of wholesale trade in medicines of ₹ 1,70,000. The consequence of bad debt recovery is that –
A. It is chargeable to tax B. It is eligible for set-off against brought forward business loss C. The brought forward business loss is taxable now D. 50% of the amount recovered now is taxable