Section 43B(h) of Income Tax Act related to MSME (Small & Micro) - Very Important Amendment

CA.Sangam Aggarwal | Last updated: 17 January 2024

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The Income Tax Act has been amended with Section 43B(h), significantly impacting payments made to micro and small enterprises (MSMEs). This amendment dictates that businesses can only claim tax deductions for payments to MSMEs in the year the payment is actually made, if it adheres to the payment timelines set out in the MSME Act, 2006. Failure to pay within these specified periods, typically 15 days or a maximum of 45 days, means the deduction will be disallowed for the current year and allowed only in the year the payment is eventually made.

Latest Amendment in Section 43B of Income Tax Act related to MSME Section 43B: Overview This Section provides some expenses which are specified under Section 43B shall be allowed as deduction under the head Income from business and profession on actual payment basis rather than accrual basis.

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1 Year PLAN

1999

(Excl. of GST ₹359)

BEST VALUE

2 Years PLAN

3499

(Excl. of GST ₹629)

3 Months PLAN

999

(Excl. of GST ₹179)

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About the Author

CA.Sangam Aggarwal

Professional

Secretary NIRC of ICAI (2022-23), Regional Council Member (2022-25), FCA, LLB, DISA, B. Com(H). CA by profession and social worker by heart. I like to debate on social issue. I love to travel and to watch movie recently i watch 12th Fail movie and it is classical movie. I believe in spreading the smile. Help student ... Read more

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