Categories of bad or doubtful debts in the case of a public company under clause (b) of section 43D.
The provisions of clause (b) of section 43D shall apply in the case of every public company where its income by way of interest pertains to the following categories of bad and doubtful debts, namely :—
a)(i(a)(i) doubtful asset, that is, a debt which has remained a non-performing asset of the nature specified in sub-clause (ii) for a period exceeding two years;
(ii) non-performing asset referred to in sub-clause (i) shall be the following :—
(1) term loan beyond one year, if the interest amount remains "past due" for six months or instalment is overdue for more than six months;
(2) lease rental or hire purchase instalment, if the rental or the instalment is "past due" for six months;
(3) bill purchased or discounted, if the bill remains overdue and unpaid for six months; or
(4) any other credit facility in the nature of short term loan or advance [other than those referred to in (1), (2) and (3) above], if any amount to be received in respect of such a facility remains "past due" for a period of six months;
(b) loss asset, that is, a debt which has been identified as loss and considered as uncollectible but has not been written off in the accounts of the assessee.
Explanation.—For the purposes of this rule, an amount shall be deemed to be "past due" when it remains unpaid for thirty days beyond the due date.