Payment to Micro and Small (MSME) vendors before 31st March
Reference – Sec 43B(h) of Income Tax Act
From AY 2024-25, any payment to a Micro or Small Enterprise (MSE) registered under MSME Act must be paid within 15 days (if no agreement) or 45 days (with written agreement).
If not paid within this time, expense will be disallowed in the current year & allowed only on actual payment.
Applicability:
- Applies to all businesses making payments to Micro & Small Enterprises (Goods Traders are not included if registered under MSME).
- Not applicable to payments to Medium Enterprises or unregistered vendors.
Kindly review your outstanding payments (outstanding more than 45 days as on 31st March) and prioritize MSE vendors accordingly.
*Please get in touch for detailed analysis of above section.
Updated on: 19.03.2025
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