Section 43B of Income Tax Act: Expenses businesses can cover apart from payment to MSMEs

Other than clause H, there are seven other clauses — a list of expenses allowed as deductions under the heading ‘Income from Business and Profession’ — under Section 43B for businesses and professionals while computing their taxable income. A section of MSMEs and traders in India is expecting the revision or revocation of the new clause H brought under Section 43B of the Income Tax Act, 1961 by the Government to address the delayed payment issue of MSMEs.

The concern among certain MSMEs in textiles and exports and traders is around the new clause that disallows expenses to their buyers on invoices unless paid within 45 days (where agreement exists) and within 15 days if there is no agreement. The expenses “shall be allowed only in computing the income referred to in section 28 of that previous year in which such sum is actually paid” the Act said. Expenses towards employees’ welfare fund, provident fund, gratuity fund, etc. are allowed under the Act.

Source : https://www.financialexpress.com/business/sme/section-43b-of-income-tax-act-expenses-businesses-can-cover-apart-from-payment-to-msmes/3483290/