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Sec 43B(h) MSME disallowed query

Yogendra Singh (103 Points)

18 September 2024

respected sir,

My client having turnover upto 8 crore. But they do not done tax audit. They file normal ITR 3 without audit. Can still sec 43B(h) disallowance are applicable.

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Rama chary Rachakonda (Master in Accounts & high court Advocate) (8613 Points)
Replied 19 September 2024

Section 43B of the Income Tax Act, 1961, deals with certain deductions that are allowed only if the specified payments are made before the due date of filing the return of income. However, if your client has a turnover of up to ₹8 crores and has not conducted a tax audit, they may still be eligible for the deductions under Section 43B. The disallowance under Section 43B(h) is applicable only if the payment is made after the due date of filing the return of income. If your client has made the payments before the due date, they can claim the deductions. However, it's important to note that: 1. Your client should have filed the return of income within the due date. 2. The payments should be made before the due date of filing the return of income. 3. Your client should have the necessary documents and records to support the claims. Additionally, since your client has a turnover of up to ₹8 crores, they may be eligible for the presumptive taxation scheme under Section 44AD. If they opt for this scheme, they can claim a deemed profit of 8% of their turnover and pay tax accordingly. Please consult a tax expert or chartered accountant to ensure your client is meeting all the necessary conditions and taking advantage of the available deductions and schemes.

JG M (24 Points)
Replied 19 September 2024

43B(h) is applicable irrespective of whether a tax audit is applicable or not.

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