Change in payment rules: If you do your own business then this news is very important for you. According to sources, the Finance Ministry is considering postponing the implementation of Rule 43B (h) under the Income Tax Act.
If you do your own business then this news is very important for you. Because the government is going to change the payment rules. Sources told CNBC-TV18 that the Finance Ministry may postpone the implementation of the 45-day payment rule for MSMEs to April 2025. Sources said the Finance Ministry is considering postponing the imposition of Rule 43B (h) under the Income Tax Act, which mandates payment to Micro, Small and Medium Enterprises (MSMEs) within 45 days. It has been said that this proposed moratorium is expected to last for the entire financial year. While the rules are expected to come into effect from April 1, 2025.
The Finance Act 2023 had amended the income tax. Under this, clause (h) was introduced in Section 43B to ensure timely payment to MSMEs. Under this change, a limit of 45 days has been set to complete the payment. If this timeline is not followed, the pending payment will be treated as income and subject to taxation.
The industry had appealed to reconsider
Earlier, the industry had appealed to the Finance Ministry to reconsider the timeline of implementation of this rule. Many sectors have expressed apprehension about the shorter payment cycle, saying it challenges current practices and have already led to order cancellations.
Industry bodies had given this suggestion
Industry bodies, in their proposal to the Finance Ministry, have suggested possible changes or temporary suspension of the Act to provide the necessary adjustment period to businesses. On February 16, the MSME Ministry had contacted several SME groups to send their feedback on this matter. Sources said SME groups were asked to send their comments by February 19.
