§1Who it is for

  • MSE suppliers (benefit)
  • Buyers who claim business expenses (compliance)

Useful if

Every micro/small supplier selling on credit.

Do not spend time on it if

Medium enterprises.

§2Eligibility

  1. Applies to sums payable by a taxpayer to a micro or small enterprise beyond the time limit in section 15 of the MSMED Act, 2006.

§3Benefits

  • Buyer gets tax deduction for the expense only in the year it is actually paid, if paid late — gives MSEs leverage to get paid within 45 days.

§4Norms — pattern of assistance

  1. Time limit is as per MSMED Act s.15: as agreed in writing, not exceeding 45 days from acceptance (PIB 2023).

§5Documents

Not published

The guideline does not list the documents. Ask the portal or bank before you apply — we do not make up lists.

§6How to apply

  1. 1

    Nothing to apply. MSEs should share their Udyam certificate with buyers and state payment terms within 45 days on invoices.

§7Pros and cons

Merits

  • Ties buyer's tax bill to timely payment.
  • Buyers must report such late sums in ITR schedules (ITR-3/ITR-6 2026 forms).

Demerits

  • Covers only micro and small (not medium) suppliers (ITR item wording).
  • It is a tax rule on the buyer, not a payment guarantee — recovery still needs MSEFC/ODR.

→Related schemes

Need help with Section 43B(h)?

Eligibility check, DPR and application file — ask us on WhatsApp.

WhatsApp usServices

Our interestHelp is our paid service. You can also apply for the scheme yourself.

Sources

  1. PIB, 24 Jul 2023: Schemes to clear delayed payment in MSMEs (Rajya Sabha reply)
  2. Income Tax Department: Section 43B
  3. Income Tax Department: ITR-3 form 2026 (43B item for MSE payments)

Checked on 18 October 2026. For information only — confirm with the department or bank. Spotted a mistake? Report it.