Section 56(2)(X) of Income Tax Act, Income Tax

[Ethirajan Parthasarathy]

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 ₹ 3.5 crores.

Whether the sum of ₹ 1.5 crores waived by the Bank will be treated as his income U/s 56(2)(X)

Posts / Replies

[Ashwani Garg]

When the liability towards the bank to the extent of INR 1.5 crores would be written off and credited in the Profit & Loss account, it would be anyways taxable as his business income. Hence, the question of taxability under section 56(2)(x) should not arise.