AskSolique reasons on
"Analyse the Indian tax, GST, corporate-law and FEMA consequences where an Indian company has advanced interest-bearing loans over several years to its wholly owned foreign subsidiary, the subsidiary has suffered losses and repayment is doubtful, and the Indian company proposes either to waive part of the loan or to convert the balance into equity. Compare the legal and tax treatment of the waiver and debt-to-equity conversion, including deductibility or loss recognition, write-off and bad-debt principles, transfer-pricing and arm's-length considerations, foreign-exchange valuation and reporting, compliance under the FEMA, 1999 and the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, Companies Act, 2013 approvals and accounting/corporate-record requirements, and any GST implications for the interest-bearing loan, waiver or conversion. Consider relevant statutory provisions, rules, RBI requirements, CBIC guidance and judicial interpretation under the Income-tax Act, 2025"