Section 43B(h) MSME 45-Day Overdue Disallowance Tracker
Compute year-end trade payable disallowances for Tax Audit Form 3CD (Clause 22) and penal interest under Section 16 of the MSMED Act.
If no written agreement exists, payment must be made within 15 days of invoice date.
Even with written agreements, the statute strictly caps payment at 45 days. Any agreement for 60/90 days is void.
43B(h) applies ONLY to Micro & Small manufacturers and service providers. Medium units and Traders are exempt.
Delays attract compound interest @ 3x Bank Rate (~20.25% p.a.) u/s 16 of MSMED Act. This interest is non-deductible!
6 Invoices Tracked
Add back to P&L in 3CD Clause 22
Paid in time or exempt
Non-deductible penal interest
| Vendor & MSME Class | Invoice & Agreement | Amount (₹) | Due Date & Payment | 43B(h) Audit Status | Action |
|---|---|---|---|---|---|
Shree Precision Components UDYAM-MH-01-0012345 MICRO ENTERPRISE | SPC/2025/112 Dated: 2026-01-15 Agreement: 45 Days | ₹3,50,000 | Due: 2026-03-01 Paid: UNPAID Delayed by 30 days | DISALLOWED u/s 43B(h) Add back to Net Profit | |
Apex Packaging Industries UDYAM-GJ-04-0098765 SMALL ENTERPRISE | API/2026/089 Dated: 2026-02-10 No Agreement: 15 Days | ₹1,85,000 | Due: 2026-02-25 Paid: 2026-02-20 | Allowed (Paid on Time) | |
Bharat Steel Fabricators UDYAM-DL-02-0055441 MICRO ENTERPRISE | BSF/25/304 Dated: 2026-01-20 Agreement: 45 Days | ₹4,20,000 | Due: 2026-03-06 Paid: 2026-03-25 Delayed by 19 days | Allowed (Paid in FY) Interest u/s 16: ₹4,475 | |
Kaveri Industrial Motors Ltd UDYAM-TN-03-0044112 MEDIUM ENTERPRISE | KIM/0451 Dated: 2026-01-10 Agreement: 45 Days | ₹8,50,000 | Due: 2026-02-24 Paid: UNPAID | Exempt from 43B(h) | |
Zenith Wholesale Hardware Traders UDYAM-KA-02-0077889 TRADER ENTERPRISE | ZWT/991 Dated: 2026-01-05 Agreement: 45 Days | ₹2,40,000 | Due: 2026-02-19 Paid: UNPAID | Exempt from 43B(h) | |
Delta Tooling Systems UDYAM-MH-01-0088221 MICRO ENTERPRISE | DTS/2026/014 Dated: 2026-03-22 Agreement: 45 Days | ₹1,90,000 | Due: 2026-05-06 Paid: UNPAID | Allowed (Paid on Time) |
Tax Audit Form 3CD (Clause 22 & Clause 26) Audit Reporting Extract
Clause 22 (MSMED Inadmissible Interest): The amount of interest inadmissible under Section 23 of the MSMED Act, 2006 for the financial year ending 2026-03-31 stands at ₹10,381.
Clause 26 (Disallowance under Section 43B(h)): Trade payables outstanding to Micro and Small enterprises beyond the statutory period of 15/45 days as on 2026-03-31 amounting to ₹3,50,000 are disallowed and added back to taxable business profits.
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Turia Practice continuously tracks your client vendor ledgers against MSME Udyam databases, sending automated WhatsApp payment alerts at Day 30 and Day 40 to eliminate Section 43B(h) tax disallowance surprises.
Statutory & Compliance Disclaimer
This tool is an automated calculation, formatting, and compliance aid provided for informational purposes only. It does not constitute formal legal, taxation, or professional auditing advice. Calculations, citations, and draft documents must be independently verified by a qualified Chartered Accountant (CA) or Company Secretary (CS) against statutory provisions and applicable ICAI/ICSI guidelines before execution or certification.