Feb to April are the months to clear the 43B(h) MSME payments…

As in last 2 years…… Be Alert …and do the needful

This article has Some ideas and Tips in MSME 43B(h) – for Tax audit, for Balance Sheet for Advance tax and for Income Tax

Alert dated 25th April-2026 at — 1 pm,

 

Current Status of 43B(h)- for FY 25-26

 

The LAW = Same as last year… There is no Change … as such… but now MSME Limit is now Rs 100 Crores… hence, more and more of your suppliers are now covered in MSME benefit scheme.

 

Section 43B(h): MSME ~ 45 Days Payment Rule.

This  provision mandates that payments for goods or services provided by MSEs must be settled within 45 days from the date of acceptance.

If businesses fail to meet this deadline, they will be at a risk to claim these payments as tax deductions.

1. So. Yes the Law is Real
2. Yes, unpaid MSME dues will be DISALLOWED
3. AND YOU WILL HAVE TO PAY TAX AT FULL RATE.. SAY 26% OR 34%
4. Yes, there was no relief
5. There was no amendment
6. Yes, 2024 and 2025 Income tax returns also went this way
7. Yes, MSME usually got a lot of payments from their customers this way
8. Yes, many companies had to pay steep taxes due to this section.
9. 

10. Nobody can save your company from accidental tax later .. if Govt “catches you” later on.

11. Have you made your Financial Budget to pay all eligible MSME vendor’s : Arrange Funds as soon as possible. Keep Buffer for new creditors, new invoices of upto 31st March 2026 also.

 

so, for all the Corporate Accountants, and Corporate Auditors, and MSME businessmen, both as receiver of funds and payer of funds, Get Ready for that time of the year…

1. Hope you have completed the work ?
2. Hope the vendor identification had been done ?
3. Hope your team had checkd Vendor MSME status on the Govt website ( that is the only evidence ), or on their invoices … keep that screenshot or PDF

1. Usually, all MSME vendors bills of 29-2-2025, already paid by 31st March or maximum, 15th April 2025…..

3. MSME vendors Bills upto 15th March 2026 are also paid between 20th and 30th April 2026.. 

5. MSME vendors Bills upto 31st March 2026  are also paid between  30th April and 10th May 2026. (Just to be safe)…

6. See this yourself.

7. Also remember to clear all the MSME dues…
8. Short cut :Vigilance point
9. SOP for future
10. 5th March by 5th April ( start the process by 30th day.. so that you are safe bye 45th day )
    10th March by 10 April
    15th March by 15th April
    20th Mar. by 20th April
    25th Mar by 25th April
    31st March… by 30th April( I have kept a Buffer )
11. 
12. If you are an MSME … you might have been benefited from this in the March payment wave, So, similarly, the WAVE continues

13. This is a benefit Govt is giving to MSME’s and if you are a MSME take this benefit from your customers….

14. Almost 4 Crores MSME are already registered and are claiming this benefit… are you taking this Benefit ???

Sent letters to all creditors ? Kept evidence ? Two rounds of emails is a must evidence. ?

Do you have letters or MOU with each MSME vendor, … with overriding clause for 45 days, irrespective of the PO’s and Invoices. ( get the format in the Google drive link below )

 

Three year MSME category Rule notification dt 18-10-2022.. Change of category upwards… you can take the benefit of previous classification for three long years. Yes you can. ( see notification in the Google drive link below )

1. Cheque Hand over   ( Cheque in Transit ?)……….? This idea can work only if you have 100% clear balance in your bank account… Else… It will not be acceptable. 

2. Money is coming automatically to most MSME’s .. every day… Congratulations, if you are the beneficiary too.

3. Hope the PSU’s also start paying in the same way. The PSU chief will be shocked with huge tax if he does not organise the payments to all the MSME vendors in time… this will create a new culture.

Google Drive link for the Powerpoint presentation , Copies of Letters, Emails, MOU.. as discussed in the Session by Mr Sangeet Kr Gupta. in the last Zoom seminar

MOU copy inside

 

43B(h) benefit ? 43B(h) action ? 43B(h) what to do ? 43B(h) safety ? 43B(h) annexure ? 43B(h) when to follow ? 43B(h)penalty? 43B(h)areyousafe?

How to check MSME reports in your ERP ? Example Finsys ERP ?

How to do this in Finsys ? Very simple… Just ask the accounts to take out the Vendor Outstanding report.. in Future date… say 1st May 2026… and see what will come as overdue on that date… all those invoices are fit to start processing.. so that you are safe.. by 1st May and so on….

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