What is the 45-day MSME payment rule (43B(h))?

Name: Vijay R Singh & Co.
Address: Office No. 4, Vishal CHSL, D Wing, Sir Mathuradas Vasanji Road, Azad Nagar, Opp. Andheri Gymkhana, Andheri East, Maharashtra, 400069, IN
Telephone: +91 98607 23959

CA Vijay R Singh, FCA
Chartered Accountant · ICAI M.No. 153926 · FRN 136869W

Short answerUnder Section 43B(h), if you buy from a micro or small enterprise and don’t pay within 45 days (or 15 days where there’s no written agreement), the expense is disallowed for tax until you actually pay it. The rule pushes buyers to pay small suppliers on time.

Pay micro/small within 45 days

Applies to dues to Udyam-registered micro and small enterprises.

Else disallowed till paid

The expense is added back to income for that year and allowed only when paid. Confirm applicability for your suppliers.

Compliance

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This answer is general information for businesses, not professional advice. Tax rates, thresholds and forms change with each Finance Act — please confirm the current position for your own facts, or speak to us, before acting.