DISALLOWANCE UNDER SECTION 43(b)(h) OF INCOME TAX ACT

This query is : Resolved 
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This discussion clarifies the application of Section 43(b)(h) of the Income Tax Act concerning payments to MSME-registered entities. It confirms that if a trader purchases scrap from an MSME-registered manufacturer and fails to make payment within the stipulated time, the disallowance provision will apply to the trader. Conversely, if a manufacturer purchases scrap from an MSME-registered trader, this disallowance provision is not applicable to the trader.

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(Querist)
05 February 2024 If an individual trader purchases scrap from manufacturer registered under MSME act then if payment not made within specified time limit, will provision disallowance applicable for such trader under 43(b)(h)?
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
05 February 2024 Yes, it's applicable..
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Suresh S. Tejwani

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Suresh S. Tejwani (Querist)
05 February 2024 What if in vice versa cases if manufacturer purchases scrap from trader registered under MSME act?
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
05 February 2024 It's not applicable for traders.
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