SAGAR PUNSHI
Quick Summary
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
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
Clause (h) of Section 43B states that any sum payable by a business to a micro or small enterprise beyond the time limits specified in Section 15 of the Micro, Small and Medium Enterprises Development Act, 2006, will not be allowed as a deduction in the year the liability was incurred.
Under the MSMED Act, payments to micro and small enterprises must be made within 15 days if there is no written agreement, or within a maximum of 45 days if there is a written agreement.
This amendment comes into effect from the Assessment Year 2024-25.
If payment is not made within the specified time, the expense will not be deductible in the year the liability was incurred. The outstanding amount will be added to the taxpayer's taxable income, and the business may also be liable for compensatory interest.
Yes, this section is not applicable if the supplier is not registered under the MSMED Act, is registered as a 'Medium Enterprise', is registered as a 'Trader', or if the assessee files income tax returns under presumptive taxation schemes like 44AD, 44ADA, or 44AE.
CAclubindia
