Submitted by admin on March 6th, 2024
According to reliable sources, the finance minister is considering adjournment of Rule 43B (h) enforcement under the Income Tax Act, which mandates payment disbursement to micro, small, and medium enterprises (MSMs) within 45 days.
Sources confirm that the proposed deferral is supposed to span an entire financial year, with the rule expected to come into effect from April 1, 2025.
The Income Tax Act was amended by the Finance Act of 2023 which introduced clause (h) in Section 43B to ensure that MSMEs receive timely payment. This amendment sets a 45-day timeline for assessees to fulfill payment obligations.
Please conform to this timeline to avoid pending payments being considered as income and taxable.
The finance ministry received many proposals requesting the authority to reconsider the timeline and hence, took a decision in their favour.
Many sectors were apprehensive of the shorter payment cycle, implying that it collides with traditional practices and has resulted in order cancellations.
Industry bodies have submitted their proposals to the finance ministry, wherein they have recommended potential tweaks to the act or a temporary deferral to ensure the necessary adjustment period for the businesses.
According to sources, the Ministry of MSME had gone further to engage with many SME groups to send their comments on this matter on February 16.
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