Decoding the New Clause (H) of Section 43B of Income Tax Act

SAGAR PUNSHI | Last updated: 21 February 2024

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A new clause (h) has been added to Section 43B of the Income Tax Act, 1961, effective from Assessment Year 2024-25. This amendment requires businesses to pay micro and small enterprises within 45 days (or 15 days if no agreement exists) to claim tax deductions. Failure to comply means the expense won't be deductible in the year incurred and may lead to additional tax liabilities.

Background As per the Income-tax Act the deduction of expenditure is allowed according to the system of accounting principles followed by the assessee. In case the assessee follows a cash system of accounting, the deduction should be allowed on an actual payment basis. In the case of a mercantile

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SAGAR PUNSHI

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I am Practising Chartered Accountant, DISA Qualified and Partner SPHJ AND ASSOCIATES, Chartered Accountants.Having been in this Industry from 2017. you can reach out to me on : casagarpunshi @ gmail.com

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Decoding the New Clause (H) of Section 43B of Income Tax Act

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