alleryStart learning →A trader earlier deducted a creditor's dues, and the creditor later waived them. Result?
ATaxed as capital gain
BExempt as a gift
CTaxed as business profit
DIgnored if agreed
Answer & Solution
Correct answer: C. Taxed as business profit
Section 41(1)(a) deems the benefit of remission of a trading liability earlier allowed to be business profits of that year.
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