The Section No. 41 of Income Tax Act 1961 Says that if any Remission of Debt occurs it would be treated as Business Income but if Creditor Confirms that Liability is Still due, than its not treated as Business income, even if Liability is due since 20-100 year ( No Worry ).
BUT IN DIRECT TAX CODE :
The Condition of 5 year has been Introduced which requires that :
- If Liability is Due Since 5 year and,
- If No transaction with Creditor had happened since these 5 year
Than the amount of debt would be treated as income under the head Business and Profession.
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