Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)
Statutory framework governing MSME classifications, prompt payment mandate under Section 15 & 16, compound interest at 3x bank rate, and Section 43B(h) disallowance linkage.
MSMED Act, 2006
Section 15 & 16: Mandatory Payment Windows & Penal Interest Buyers must discharge dues to registered Micro and Small enterprises within agreed credit terms (maximum 45 days) or 15 days in the absence of written agreement. Failure triggers compound interest with monthly rests at 3x the RBI Bank Rate, which is strictly inadmissible as a deductible expense.
Need Legal or Compliance Advisory?
Our senior Chartered Accountants and tax attorneys provide tailored interpretation for your enterprise.
Statutory Details
The information, acts, rules, circulars, notifications, tax rates, and calculators provided in this Knowledge Bank are intended strictly for general educational and informational purposes. Laws, statutory rules, rate matrices, procedures, and statutory due dates may change through subsequent government notifications, official circulars, parliamentary amendments, or judicial rulings.
Taxpayers are strongly advised to verify the latest official gazette publication or consult a qualified Chartered Accountant / legal counsel before executing financial decisions or statutory submissions based on this data.