{"id":26110,"date":"2024-01-28T22:52:45","date_gmt":"2024-01-28T17:22:45","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=26110"},"modified":"2024-08-17T23:46:54","modified_gmt":"2024-08-17T18:16:54","slug":"msme-delay-payment-43bh","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/","title":{"rendered":"MSME delay payment Provision u\/s 43B(h): Deferred Deduction"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e566508585b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e566508585b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#Legal_Provision_of_Section_43Bh_of_the_Income_Tax_law\" title=\"Legal Provision of Section 43B(h) of the Income Tax law.\">Legal Provision of Section 43B(h) of the Income Tax law.<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#What_is_come_under_the_definition_of_Small_Enterprises\" title=\"What is come under the definition of Small Enterprises?\">What is come under the definition of Small Enterprises?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#What_is_come_under_the_definition_of_Micro_Enterprises\" title=\"What is come under the definition of Micro Enterprises?\">What is come under the definition of Micro Enterprises?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#MSME_units_delay_payment_Legal_provision_under_Section_43Bh\" title=\"MSME units delay payment Legal provision under Section 43B(h):\u00a0\">MSME units delay payment Legal provision under Section 43B(h):\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#Analysis_of_the_Legal_Provision_of_Section_43Bh_Clause\" title=\"Analysis of the Legal Provision of Section 43B(h) Clause:\">Analysis of the Legal Provision of Section 43B(h) Clause:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#Interest_us_16_of_the_Micro_Small_Medium_Enterprises_Development_Act_2006\" title=\"Interest u\/s 16 of the Micro, Small &amp; Medium Enterprises Development Act, 2006\">Interest u\/s 16 of the Micro, Small &amp; Medium Enterprises Development Act, 2006<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#Is_it_possible_to_deduct_the_interest_deduction_in_Income_Tax_Computation\" title=\"Is it possible to deduct the interest deduction in Income Tax Computation?\">Is it possible to deduct the interest deduction in Income Tax Computation?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#SECTION_43B_CLAUSE_h\" title=\"SECTION 43B CLAUSE (h)\">SECTION 43B CLAUSE (h)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/msme-delay-payment-43bh\/#Draft_Comments_for_section_43Bh_for_Tax_Audit_Report_Form_3CA-3CD_and_Form_3CB-3CD\" title=\"Draft Comments for section 43B(h) for Tax Audit Report Form 3CA-3CD and\u00a0Form\u00a03CB-3CD.\">Draft Comments for section 43B(h) for Tax Audit Report Form 3CA-3CD and\u00a0Form\u00a03CB-3CD.<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-26190\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/SECTION-43B-CLAUSE-h-.jpg\" alt=\"SECTION 43B CLAUSE (h)\" width=\"966\" height=\"1094\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/SECTION-43B-CLAUSE-h-.jpg 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/SECTION-43B-CLAUSE-h--265x300.jpg 265w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/SECTION-43B-CLAUSE-h--768x870.jpg 768w\" sizes=\"(max-width: 966px) 100vw, 966px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Legal_Provision_of_Section_43Bh_of_the_Income_Tax_law\"><\/span><a href=\"https:\/\/carajput.com\/archives\/all-about-amendment-section-43b-of-income-tax-act.pdf\"><span style=\"color: #ff0000;\"><strong>Legal Provision of Section 43B(h) of the Income Tax law.<\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"What_is_come_under_the_definition_of_Small_Enterprises\"><\/span><span style=\"color: #000080;\"><strong>What is come under the definition of Small Enterprises?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Business Enterprise which is completed all below conditions.<\/p>\n<p>(a) Sale\/ Turnover should not more than INR 50,00,00,000\/-<\/p>\n<p>(b) Investment is P&amp;M Should not exceed INR 10,00,00,000\/-<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_come_under_the_definition_of_Micro_Enterprises\"><\/span><span style=\"color: #000080;\"><strong>What is come under the definition of Micro Enterprises?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Business Enterprise which is completed all below conditions.<\/p>\n<p>(a) Investment is P&amp;M Should not more than INR 1,00,00,000\/-<\/p>\n<p>(b) Sale\/ Turnover should not more than INR 5,00,00,000\/-<\/p>\n<h3><span class=\"ez-toc-section\" id=\"MSME_units_delay_payment_Legal_provision_under_Section_43Bh\"><\/span><span style=\"color: #000080;\"><strong><span class=\"d9FyLd\"><span class=\"hgKElc\">MSME units delay payment Legal provision under <\/span>Section 43B(h):\u00a0<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span class=\"hgKElc\">Income tax taxpayers have to take precautionary measures to avoid disallowance of expenditure which may be outstanding to Micro Small Enterprises\/units as on 31-03-2024 representing expenditures of the FY 2023-24.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-26192\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43B.jpg\" alt=\"sec 43B\" width=\"915\" height=\"1483\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43B.jpg 586w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43B-185x300.jpg 185w\" sizes=\"(max-width: 915px) 100vw, 915px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Analysis_of_the_Legal_Provision_of_Section_43Bh_Clause\"><\/span><span style=\"color: #000080;\"><strong>Analysis of the Legal Provision of Section 43B(h) Clause:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Business Enterprise required to pay to small &amp; micro Enterprise suppliers within Fifteen to Forty Five days as per sec 15 of the Micro, Small &amp; Medium Enterprises Development Act, 2006<\/li>\n<li>The amount owed will be added to your taxable income if it is not paid within the specified time frame.<\/li>\n<li>Payments must be provided within Fifteen days if there are no written agreements.<\/li>\n<li>In the event of a legal written contract, outstanding payment must be made by the deadline specified. The agreements will last no more than Forty-Five days.<\/li>\n<li>Creditors \u0915\u094b Time \u0938\u0947 Payment \u0928\u0939\u0940\u0902 \u0915\u0940 \u0924\u094b Expense \u0939\u094b\u0917\u093e Disallowed.<\/li>\n<li>Delay in Making Payment to Micro and Small Enterprises Means Deferred Deduction<\/li>\n<\/ol>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-26306\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/MSME.jpg\" alt=\"MSME Payment disallowance\" width=\"1052\" height=\"1280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/MSME.jpg 1052w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/MSME-247x300.jpg 247w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/MSME-842x1024.jpg 842w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/MSME-768x934.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/MSME-800x973.jpg 800w\" sizes=\"(max-width: 1052px) 100vw, 1052px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Interest_us_16_of_the_Micro_Small_Medium_Enterprises_Development_Act_2006\"><\/span><span style=\"color: #000080;\"><strong>Interest u\/s 16 of the <a href=\"https:\/\/carajput.com\/archives\/msme-applicability-criteria.pdf\">Micro, Small &amp; Medium Enterprises Development Act, 2006<\/a><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>What are the consequences of not making the payment within prescribed time frame?<\/p>\n<ul>\n<li>If payments are not made within the allotted time, the amount will be added to the assesses&#8217; taxable income, and they will be responsible for paying the applicable taxes. Where payments are made in PY, the taxpayer receives a deduction.<\/li>\n<li>If a Enterprises fails to pay Micro &amp; Small Enterprises within the allotted time frame, it will be required to pay compound interest to the supplier on a monthly basis at a rate three times the bank interest as announced by the RBI.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-26191\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43Bh.jpg\" alt=\"\" width=\"1080\" height=\"957\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43Bh.jpg 1080w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43Bh-300x266.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43Bh-1024x907.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43Bh-768x681.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/43Bh-800x709.jpg 800w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Is_it_possible_to_deduct_the_interest_deduction_in_Income_Tax_Computation\"><\/span><span style=\"color: #000080;\"><strong>Is it possible to deduct the interest deduction in Income Tax Computation?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>According to Section 16, these interest costs qualify as penal interest. Accordingly, Interest costs incurred for late payments to Micro &amp; Small Enterprises is not allowed u\/s 37 of Income Tax Act,1961,<\/p>\n<p><span style=\"color: #000080;\"><strong>Key Note:<\/strong> <\/span>Micro and Small Enterprises are covered under section 43N(h), So Legal Provision of Section 43B(h) shall not be applicable on Medium Enterprises.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"SECTION_43B_CLAUSE_h\"><\/span><span style=\"color: #000080;\"><strong>SECTION 43B CLAUSE (h)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-26111\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/photo_2024-01-19_23-16-36.jpg\" alt=\"MSME units delay payment Legal provision under Section 43B(h)\" width=\"1080\" height=\"734\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/photo_2024-01-19_23-16-36.jpg 1080w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/photo_2024-01-19_23-16-36-300x204.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/photo_2024-01-19_23-16-36-1024x696.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/photo_2024-01-19_23-16-36-768x522.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/photo_2024-01-19_23-16-36-800x544.jpg 800w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"Draft_Comments_for_section_43Bh_for_Tax_Audit_Report_Form_3CA-3CD_and_Form_3CB-3CD\"><\/span><span style=\"color: #000080;\">Draft Comments for section 43B(h) for Tax Audit Report Form 3CA-3CD and\u00a0Form\u00a03CB-3CD.<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-27274\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/Draft-Comments-for-section-43Bh-for-Tax-Audit-Report-Form-3CA-3CD-and-Form-3CB-3CD.-.jpg\" alt=\"Draft Comments for section 43B(h) for Tax Audit Report Form 3CA-3CD and\u00a0Form\u00a03CB-3CD.\" width=\"1047\" height=\"1471\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/Draft-Comments-for-section-43Bh-for-Tax-Audit-Report-Form-3CA-3CD-and-Form-3CB-3CD.-.jpg 1047w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/Draft-Comments-for-section-43Bh-for-Tax-Audit-Report-Form-3CA-3CD-and-Form-3CB-3CD.--214x300.jpg 214w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/Draft-Comments-for-section-43Bh-for-Tax-Audit-Report-Form-3CA-3CD-and-Form-3CB-3CD.--729x1024.jpg 729w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/Draft-Comments-for-section-43Bh-for-Tax-Audit-Report-Form-3CA-3CD-and-Form-3CB-3CD.--768x1079.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/01\/Draft-Comments-for-section-43Bh-for-Tax-Audit-Report-Form-3CA-3CD-and-Form-3CB-3CD.--800x1124.jpg 800w\" sizes=\"(max-width: 1047px) 100vw, 1047px\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Legal Provision of Section 43B(h) of the Income Tax law. What is come under the definition of Small Enterprises? Business Enterprise which is completed all below conditions. (a) Sale\/ Turnover should not more than INR 50,00,00,000\/- (b) Investment is P&amp;M Should not exceed INR 10,00,00,000\/- What is come under the definition of Micro Enterprises? Business &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[150],"tags":[10122],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/26110"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=26110"}],"version-history":[{"count":6,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/26110\/revisions"}],"predecessor-version":[{"id":27275,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/26110\/revisions\/27275"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=26110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=26110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=26110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}