Payments to MSMEs vis-a-vis Section 43B(h) of the Income-tax Act, 1961

CA V.K. Subramani

Presently the hot topic of discussion is about the payment for MSMEs before 31st March, 2024 and the tax consequence of such non-payment. Clause (h) to section 43B was inserted by the Finance Act, 2023 and would be applicable for the assessment year 2024-25 onwards. Non-payment of dues within the specified time and which is outstanding as at 31st March of every previous year would be liable for disallowance which means it would be treated as taxable income of the taxpayer.