Section 43B of the Income-tax Act, 1961 provides a list of several expenses allowed as a deduction on a payment basis.
Introduced by the Finance Act 2023, Section 43B(h) adds a new twist for businesses dealing with Micro and Small Enterprises (MSEs). Any sum payable to them beyond the time limit specified in the MSMED Act shall be allowed as a deduction in the previous year in which such sum is actually paid.
This article provides frequently asked questions on Section 43B(h) and discusses the challenges it presents for businesses seeking to maintain smooth and compliant payment practices with MSEs.
