Non-Performing Asset (NPA) Tax Treatment

Tax Glossary Definition

Non-Performing Asset (NPA) Tax Treatment

Refers to the taxation rule where interest income on non-performing assets is recognized and taxed only when it is actually received. Any deduction for unrealized interest is deferred until the income is realized. Example: A bank cannot claim a deduction for ₹10,000 of overdue interest on an NPA until the borrower makes the payment.

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