Question ID :
38001
section 56(2)(X) of income tax
An individual has defaulted in repaying Bank Loan. Later one time payment is settled and the barrower was asked to pay only let us say 2 crore as against outstanding demand of Rs.3.5 crores.
Whether the sum of Rs.1.5 crores waived by the Bank will be treated as his income U/s 56(2)(X)
Posted by
Ethirajan
on
Feb 25, 2019
Filed Under
DIRECT TAXES
No, The amount of waiver will not be taxable .
The SC’s has concluded in one of the case law that a waiver of
loan being a cash benefit cannot be taxed
as business perquisite , would appear to
apply to waiver of both types of loans –
whether used for acquiring capital asset or
for working capital purposes. Additionally,
SC’s conclusion that waiver of loan cannot
be taxed under the claw back provision also
applies to both types of loans.
Posted by
CA. BISHT RAKESH on
Feb 25, 2019
Answer ID :
76313
Remission and cessation of trading liabiliy taxable under section 41 of the income tax act. waiver of principal amount is not taxable under section 41, however waiver of interest component is taxable under section 41
Posted by
CA. Umesh kumar on
Feb 27, 2019