Msme interest

Sir, First of all you mentioned old 3CD format point number in the post and it is point number 28 in new 3CD format. Generally if MSME sued for Interest then only you are liable to pay Interest @ 3times interest rate notified by RBI which will be disallowed for Income tax computation. If really MSME sued for it and you paid then only you need to mention it in form 3CD.

Hi Nuli, Thanks for the reply, I want to know whether there is any guidance or any other reference, case law etc. from where this interpretation can be derived. I know practically this should be the case but is there any written refrence for the same to be interpreted like that. 

Under section 23 of MSMED Act, it stated that any Interest Payable or paid by any buyer under or in accordance with the provisions of the act shall not be allowed as deduction for the purpose of computation of Income tax under Income tax act,1961. In the above definition it clearly stated that any Interest payable or paid. If it is payable or paid by you, you need to make provision for it where it will be debited to profit and loss account. Therefore from the Interpretation of such definition we can clearly derived that unless you make provision for it in P&L a/c you will not to come under provision of sec.23 of MSMED act,2006. and it clearly stated that you will not be allowed deduction, that means it is actually deduction but you will not be allowed to claim. when you actually payable or paid then only concern about deduction arises. Me too prepare form 3CD where we don't take such matter in to consideration.

Thanks, Nuli for your precious time & instant reply.