Section 21: Bad debts and irrecoverable sums

21. Bad debts and irrecoverable sums (1) Subject to subsection (3), a person who derives gross income specified in section 10 (1) (b) in an income year may deduct the amount of a debt or sum which is proved to have become bad and to have been actually written off as a bad debt by the person in that income year. (2) Subject to subsection (3), a person who derives gross income, other than gross income specified in section 10 (1) (b), may deduct any debt or sum not received in an income year but which is deemed to be derived in that income year and which is proved to have become irrecoverable by the person. (3) Any amount allowed as a deduction which is subsequently received by the person on account of any bad or irrecoverable debt shall be deemed to be gross income derived in the income year in which it is received.