The 45-day rule that raised his tax.
Under Section 43B(h) of the Income-tax Act, payments due to micro and small enterprises beyond the agreed period (maximum 45 days) are allowed as an expense only when actually paid. Pay late, and the deduction can be pushed out, raising your tax for the year.
Real client case (name confidential): a manufacturer paid MSME vendors after 45 days, and those expenses got disallowed until payment.
What to do:
1. Check the Udyam status of every vendor.
2. Tag MSME vendors in your accounting software.
3. Set automatic due-date alerts and automate the routine.
Comment MSME for the vendor checklist.
Note: This is general information, not professional advice. Consult your CA for your specific case.
CA Satish Borkar | S.S. Borkar & Associates, Pune
📞 +91 89561 36208 | ✉️ cassborkar@gmail.com
#MSME #Section43Bh #IncomeTax #Manufacturing #TechCFO #CAadvice #SMEIndia #Udyam
source
🎉🎉