CBDT Circular: Practical Guidelines on Section 43B(h) MSME Disallowance

# Practical Implementation of Section 43B(h) The Central Board of Direct Taxes (CBDT) issued operational clarifications regarding payments made to enterprises registered under the MSMED Act, 2006. ## Critical Compliance Rules: 1. **Beneficiary Category**: Section 43B(h) applies **only to Micro and Small manufacturing/service enterprises**. Medium enterprises are explicitly excluded. 2. **Traders / Retailers**: Wholesale and retail traders holding Udyam registration solely for Priority Sector Lending (PSL) do not fall under Section 15 of MSMED Act. 3. **Year-End Accruals**: Deductions are disallowed in the current financial year if payments are delayed beyond 45 days (with agreement) or 15 days (without agreement), and are allowed only in the year of actual payment.