Skip to main content

One Section can change your business perspective-Section 43B(h)

Everything about Section 43B(h)

Section 43B(h)-Payment based deduction for amount payable to micro and small enterprise

👉Applicable from AY 2024-25 onwards
-Not Applicable for Transaction pertaining to on or before 31/03/2023

👉Due Date for Payments
-15 Days from Date of Acceptance if No Written Agreement
-45 Days from Date of Acceptance if Written Agreement is there

👉Applicable for Amount payable to micro and Small Enterprise (MSE) who are manufacturers or service providers
-Not Applicable for amount payable to medium enterprises
-Not Applicable for amount payable to unregistered MSEs
-Not Applicable for amount payable to traders because their registration on UDYAM portal is for the purpose of priority sector lending only

👉Applicable for the amount payable for Goods & Services
-Not Applicable for actionable claims and money
-Not Applicable on Interest on Loans as it is not goods nor services
-Not Applicable on Salary as it is not goods nor services
-Not Applicable on Amount Payable for Capital Goods as it was not claimed as Expense

👉Definitions
-Buyer means whoever buys any goods or receives any services from a supplier for consideration
-Supplier means a micro or small enterprise, which has filed a memorandum with the authority referred to as u/s 8(1)
-Manufacture means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use

👉Not Applicable for Buyer filing ITR u/s 44AD/44ADA/44AE (Presumptive Taxation)
-These sections have overriding effect over section 28 to 43C, so section 43B(h) not applicable
-If buyers turnover below 10 Crore and Cash transactions is below 5% then audit u/s 44AB is not applicable but Books of Accounts are required to be maintain, in such cases section 43B(h) is Applicable

👉If Amount payable to MSE is liable to TDS and that TDS is also not paid to government then dis-allowance will be u/s 43B(h) only and not under section 40(a)(ia)

👉If Amount payable to MSE is inclusive of GST then dis-allowance will be limited to the amount exclusive of GST because GST was never claimed as expenses so it can't be dis-allowed as expenses

👉Form 3CD for FY 23-24 are yet to be notified by Income Tax Department so what to be reported in Form 3CD will be known once the notification of Form 3CD by Departments.

Comments

Post a Comment

Popular posts from this blog

Income Tax Department Grapples with 9.7 Million ITR Backlog, Taxpayers Await Refunds

The Income Tax (I-T) Department is facing a significant backlog of over 9.7 million verified income tax returns (ITRs) for the Assessment Year (AY) 2025-26, according to the latest official figures. As of Sunday, November 2, 2025, while the department has successfully processed a substantial 6.72 crore (67.2 million) ITRs, a staggering 97,07,702 verified returns remain in the queue, causing anxiety among taxpayers, especially those expecting refunds. The data, sourced directly from the Income Tax Department’s official portal and reflected in a screenshot from November 2, reveals the scale of the task. The department has received 8,01,81,924 filed returns, of which 7,69,31,814 have been verified by taxpayers. The gap between verified and processed returns constitutes the current backlog. (Screenshot of the Income Tax Department portal showing ITR statistics as on November 2, 2025) This delay is particularly troubling for individuals who filed their returns around the July 31...
Post a Comment
Read more

Form 10IEA Filing Requirements

Default Regime is New Regime for ITR Filing Form 10IEA Filing Requirements  ITR 1 - No Requirements to File Form 10IEA to Opt for old regime or re-entering to New Regime (No Switching Restrictions) ITR 2 - No Requirements to File Form 10IEA to Opt for old regime or re-entering to New Regime (No Switching Restrictions) ITR 3 - Form 10IEA Filing mandatory when opting for old regime and if opting again for New Regime in subsequent Year  (if opted old regime for one year and then opted for new regime in subsequent year then not eligible to opt old regime again means one time Switching option is there (Need to file Form 10IEA maximum 2 times only, First when you opt for old regime and Second when you opt for new regime in subsequent year and leaving old regime) (If Form 10IEA already filed for old regime for particular year then cant opt new regime in such year and vice-versa) ITR 4 - Form 10IEA Filing mandatory when opting for old regime and if opting again for New Regime in subse...
Post a Comment
Read more

🚨 ITR REFUND ALERT – READ THIS BEFORE 31 DEC 🚨

Thousands of taxpayers are suddenly receiving this message 👇 👉 “Your ITR refund is on hold due to risk management discrepancies. File revised return within a week.” 💡 Irony? ⏳ Income Tax Dept took 4+ months to identify the issue ⏰ And now gives taxpayers barely a few days to fix it ❓ Why no detailed email received? Because most of these are system-generated risk flags. Sometimes:  • Email goes to old registered ID • Lands in spam • Or only SMS/portal alert is triggered 👉 Always check the ITR portal → e-Proceedings / Worklist 📌 What does “ITR processing on hold” mean? It does NOT mean notice or scrutiny ❌ It means:  🔹 Refund claim looks unusual compared to data available with department 🔹 Return is paused before issuing refund 🔹 Taxpayer is given a chance to self-correct ⚠️ Common reasons refunds get flagged : 🔹 TDS/TCS mismatch TDS claimed in ITR is higher than what appears in Form 26AS (employer/bank hasn’t deposited or corrected data yet) 🔹 AIS vs ITR income mismat...
Post a Comment
Read more