Urgent : Provision for bad debts : bad debts : income tax?

Provision for bad debts has been created at 50% of the outstanding debtors by debiting the Bad Debt A/c ( expense) and crediting Provsion for bad debt a/c. (liablilty) during 2006-07.
Is the above expense of Bad-debt allowable as a deduction from Business Income , while computing Income for Income tax purposes.
I await a prompt answer. thanks..........

High bad debts can only be allowed if you areable to prove that they are genuine bad debts and mere provisioning will not help ur case to claim such high bad debts

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bad debts is a allowable expense subject to certain conditions but provision for bad debts is not allowable as it is a provision but not actual expense. the conditions to be looked for claiming bad debts are- a) it pertains to the business in question and happened in ordinary course of business b) debt is genuine c) it is guaranteed from the circumstances that there is no possibility of its recovery. only when it is 100% sure that the amount is irrecoverable it is considered "bad debt" and deductible as an ordinary business expense.

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