Section 43B(h) MSME 45-Day Payment Rule: Impact on Purchases and Tax Deductions

The Game-Changing Section 43B(h) Amendment

Introduced via Finance Act 2023, Section 43B(h) stipulates that any sum payable to a Micro or Small enterprise beyond the time limit specified in Section 15 of the MSMED Act, 2006 (15 days without agreement, maximum 45 days with written agreement) shall be disallowed as an expenditure in that financial year and taxed as business profit.