Provision for bad-debts and income tax rules?

Question

Can I provide for 50% of Debtors as " Provision for Bad Debts " by debiting the profit and loss account in a particular year.
Will such a Bad-Debt expense be allowed for purpose of Computation of Income for Income Tax Returns.
What are the I-Tax rules in respect of the above ?
A detailed explanation is desirable.

Thanks in advance..............

Answer 1

From what I know, a specific allowance for doubtful debt is allowable for tax deduction but not a general allowance at whatever percent. If it's a general allowance you have to add back that expense for tax computation purposes. If it's a specific allowance made for an identified debtor and with good reasons, then the specific allowance is allowed as a tax deduction.

Answer 2

Well both are correct. By printing more money, we can inflate the amount of money in the economy. At the same time the value of our debt to its holders will fall since the dollar is worth less. But right now we have so much debt we would have to inflate the heck out of the money, pay off the debt, then try to fix the currency value, or even just scrap the currency all together for one with a better international value.. AMERO anyone?