What is a bad debt and how is it written off in the books?

A bad debt is an amount owed by a customer that you have concluded cannot be recovered, for example because the customer has become insolvent or cannot be traced.

When you write it off, you debit the Bad Debts expense account and credit the customer's account, so the receivable is removed from your books. If you had already made a provision for doubtful debts, the loss can be set against that provision instead.

Keep proof that you tried to recover the money. For the tax treatment, including how GST and income tax handle a written-off debt, confirm the specifics with your CA.