A new Clause (h) to Section 43B has been inserted in the last Finance bill which is applicable from 1st April 2024. As per section 43B(h) , Any sum payable by the assessee to a micro or small enterprises, beyond the time limit specified in section 15 of the Micro, small and Medium Enterprises Development Act 2006. shall be allowed as deduction only on actual payment. Section 15 of the MSMED Act mandates payments to MSMEs within the time as per the written agreement, which cannot be more than 45 days. If there is no such written agreement, the section mandates that the payment shall be made within 15 days from the actual delivery of goods or services.

RAI has received submission from various members highlighting possible impact of this clause on their business. We would like to submit to the Central govt to allow buyers to make payments till the filing of returns like all the other clauses of Section 43B of the Income Tax Act.