Clause 43B(H) - Make Sure to Make Payments within 45 Days to MSMEs..pdf

The recent amendment to Section 43B of the Income Tax Act, 1961, focusing on Clause (H), which mandates timely payments to Micro, Small, and Medium Enterprises (MSMEs) within 45 days. It emphasizes the importance of prompt payments for MSMEs' financial health, outlines the impacts of non-compliance, and offers best practices for businesses, including robust payment processes and engagement with tax experts. Antraweb Technologies Pvt. Ltd.'s MSME module is introduced as a solution to facilitate compliance with Clause 43B(H). Overall, the blog stresses the significance of adhering to the amendment for MSMEs' sustainable growth and businesses' financial stability.

1. Clause 43 B ( H ) - Make Sure to Make
Payments within 45 Days to MSMEs .
- Antraweb Technologies Pvt . Ltd .

2. Importance of Timely Payments
1
Impact on Cash Flow
Delays in payments can affect the
cash flows , making it difficult to meet
operational expenses and statutory
payments .
2
Legal Implications
Non - compliance with Clause 43 B ( H )
may lead to penalties and disallowed
deductions for income tax .
3
Financial Stability
Timely payments are crucial for managing cash flow and avoiding unexpected tax
liabilities .

3. Amendments in Section 43 B ( H )
1
Government Action
The recent amendment to Section 43 B includes Clause ( H ) in the Income Tax Act 1961,
providing relief to MSMEs facing payment delays .
2
Special Tax Benefits
Section 43 B ( H ) offers tax benefits to small businesses , aiding their financial management
and growth .
3
New Payment Terms
Buyers are now required to clear payments to MSMEs within 45 days from the date of
invoice creation .

4. Impacts on Businesses
Disallowed Deductions
Failure to make payments within 45
days may result in disallowed
deductions for income tax .
Penalties and Interest
Non - compliance with Clause 43 B ( H )
can lead to penalties and interest
charges , impacting the business
financially .
Cash Flow Management
Timely payments are crucial for
effective cash flow management and
avoiding unexpected tax liabilities .

5. Best Practices for Businesses
1
Robust Payment Processes
Buyers must ensure timely
payments within the 45- day
period to avoid financial
implications .
2
Documentation
Maintaining accurate records of
payments and invoices is essential
for audits and checks .
3
Monitor Cash Flows
Regularly monitoring cash flows
helps anticipate and manage
payments effectively .

6. Practical Tips for Businesses
1
Open Communication
Maintain open communication with MSME suppliers
regarding agreements and payments to build trust .
2
Use of Technology
Implement payment tracking systems and software to
monitor and manage payment deadlines efficiently .

7. Antraweb ’s Solution Break - Through
MSME Module
Antraweb Technologies Pvt . Ltd . has developed the MSME
module , focusing on providing a list of due payments to
businesses .
Unique Filter Option
The module includes a unique filter option that highlights
outstanding payments to MSME suppliers .

8. Conclusion : Supporting MSMEs
1
Financial Support
Clause 43 B ( H ) aims to suppor t MSMEs by mandating
timely payments within 45 days , easing their financial
burden .
2
Contribution to Economy
Timely payments not only benefit MSMEs but also
contribute to the overall financial health and stability of
businesses .

9. Role of MSMEs in Economic Growth
Employment Generation
MSMEs significantly contribute
to employment generation ,
fostering economic growth .
Industrial Production
They play a crucial role in
industrial production , driving
economic development .
Financial Challenges
MSMEs face challenges related
to financial access and growth
oppor tunities due to their
smaller size .

10. Engagement with Tax Experts
1
Guidance
Seeking guidance from tax exper ts ensures a thorough understanding of Clause 43 B ( H ) and its
implications for the business .

11. Want to Explore more about Clause 43 B ( H )
Click on the Link below for the Full Blog & Website Visit
Make Sure to Make Payments within 45 Days to MSMEs .
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