Every aspect of the Finance Act 2023 amendment — who it covers, the 15/45-day rule, compound interest under MSMED Act, Form 3CD audit reporting, contested issues, and year-end compliance checklist for AY 2025-26 and AY 2026-27.
Why Section 43B(h) Was Introduced
Delayed payments from large buyers to Micro and Small Enterprises (MSEs) have historically been one of the most debilitating problems in India’s MSME sector. Despite the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 prescribing a maximum 45-day credit period and mandating compound interest on delayed payments, enforcement was weak. Large buyers routinely stretched payment cycles to 90, 120, even 180 days — treating MSME suppliers as captive working capital providers.
The Finance Act, 2023 introduced a new and far sharper lever: a tax disallowance. By inserting clause (h) in Section 43B of the Income Tax Act, 1961, the government made it financially costly for buyers to delay MSME payments beyond the prescribed limit. If the payment is not made within the MSMED Act’s timeline, the expense is simply not deductible that year — increasing the buyer’s taxable income and immediate tax outgo. The provision has been effective from Assessment Year 2024-25 (Financial Year 2023-24 onwards).
Working capital crisis in MSMEs
MSEs operating on thin margins with limited access to formal credit cannot sustain themselves when large buyers hold payments for 90–180 days. Late payment was directly responsible for MSME closures and NPAs in MSME-focused bank lending.
MSMED Act was insufficient alone
The MSMED Act already prescribed interest at 3× RBI bank rate. But MSEs rarely enforced it — fear of losing the business relationship made them accept delayed payments silently. The tax disallowance removes the buyer’s incentive to delay regardless of supplier acquiescence.
Two-front attack on late payment
Section 43B(h) works in combination with the MSMED Act’s interest provision. Together, they create financial consequences on two fronts: the MSMED Act punishes the buyer with non-deductible compound interest; Section 43B(h) defers the principal deduction itself. Both simultaneously.
The Statutory Text & the MSMED Act Link
“Any sum payable by the assessee to a micro or small enterprise beyond the time limit specified in section 15 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), shall be allowed as a deduction only on actual payment.”
“Where any supplier supplies any goods or renders any services to any buyer, the buyer shall make payment therefor on or before the date agreed upon between him and the supplier in writing or, where there is no agreement in this behalf, before the appointed day:
Provided that in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days from the day of acceptance or the day of deemed acceptance.”
The critical linkage: Section 43B(h) of the IT Act does not independently prescribe a payment timeline — it imports the timeline from Section 15 of the MSMED Act. This means the tax provision and the commercial law provision are inseparably linked. Any interpretation question about “when does the payment clock start?” or “what counts as acceptance?” must be resolved by reference to the MSMED Act, not the Income Tax Act.
What is the “Appointed Day” under the MSMED Act?
The MSMED Act defines “appointed day” as the day immediately after the expiry of 15 days from the day of acceptance (or deemed acceptance) of goods or services. This is the default payment deadline when no written agreement exists. If an agreement exists, payment must be by the agreed date — but the agreement cannot extend the period beyond 45 days from acceptance. Any contractual clause purporting to allow payment beyond 45 days is void to that extent.
Who Is — and Is Not — Covered
The scope of Section 43B(h) is precisely defined and contains several important limitations that are the source of most contested issues in practice. Understanding who is covered — and specifically who is excluded — is the first step in any compliance analysis.
| Category | Covered by Sec. 43B(h)? | Reasoning |
|---|---|---|
| Micro Enterprise (Plant & machinery/equipment investment ≤ ₹1 crore AND turnover ≤ ₹5 crore — manufacturer/service provider) | ✔ Yes — Fully Covered | Explicitly within the scope of the provision. Must verify Udyam Registration. |
| Small Enterprise (Investment ≤ ₹10 crore AND turnover ≤ ₹50 crore — manufacturer/service provider) | ✔ Yes — Fully Covered | Explicitly within the scope of the provision. Must verify Udyam Registration. |
| Medium Enterprise (Investment ≤ ₹50 crore AND turnover ≤ ₹250 crore) | ✘ Not Covered | Section 43B(h) specifically refers to “micro or small enterprise” — Medium enterprises are excluded. Section 15 of MSMED Act and the interest provisions under Section 16/23 still apply commercially, but no IT Act disallowance arises. |
| MSME Trader (wholesale or retail trader registered under Udyam for lending purposes per OM 01.09.2021) | ✘ Not Covered | Per the Ministry of MSME Office Memorandum dated 01.09.2021, retail and wholesale traders are included in MSME for lending purposes only — they are not “suppliers” under Section 2(n) of MSMED Act for Section 15 purposes. Hence, no 43B(h) disallowance on payments to MSME traders. |
| Unregistered supplier (qualifies as Micro/Small by size but has not obtained Udyam Registration) | ✘ Not Covered | Registration under MSMED Act is a prerequisite for the MSMED Act provisions (including Section 15) to apply. If the supplier has not registered, they are not a “registered” MSME and Section 43B(h) does not apply to payments to them. |
| Supplier who has not informed buyer of MSME status | ⚠ Disputed | Where the supplier has not intimated their MSME registration to the buyer, most practitioners take the view that no disallowance can be made — the buyer cannot be penalised for information they did not have. This is a contested position — see Litigation Risks section. |
| Buyer — does the buyer also need MSME registration? | No — buyer need not be registered | The provision applies to all assessees making payments to MSEs — irrespective of whether the buyer/payer is itself registered under MSMED Act. Any business — a large company, an individual, an LLP — is subject to Section 43B(h) if they buy from an eligible MSE. |
Critical distinction: Manufacturer / Service Provider vs. Trader
This is the single most practically important exclusion in Section 43B(h). A supplier who has registered as a Micro or Small Enterprise under Udyam for trading activity (wholesale or retail) is not a “supplier” under Section 15 of the MSMED Act for payment purposes. Therefore, even if you are making a late payment to an Udyam-registered entity, if their registration reflects them as a trader, Section 43B(h) does not apply. Conversely, if they are registered as a manufacturer or service provider, the provision fully applies. Always verify the nature of activity in the Udyam Registration Certificate — not just the fact of registration.
The 15-Day and 45-Day Timeline — How the Clock Works
No Written Agreement — 15-Day Rule
Written Agreement Exists — Up to 45-Day Rule
Invoices received in February and March — a year-end trap
If goods are accepted on, say, 15 February 2025 (with a 45-day written agreement), payment must be made by 31 March 2025. If not, the expense is disallowed in FY 2024-25 and shifts to FY 2025-26 (the year of actual payment). This creates a hard year-end crunch for businesses with high MSME procurement in February and March. Plan payment cycles carefully for Q4 invoices.
Acceptance vs. Deemed Acceptance — When Does the Clock Start?
Deemed acceptance — the silent ticking clock
Where goods are delivered but the buyer raises no written objection within 15 days of delivery, the MSMED Act deems the goods accepted on the day of delivery. The payment clock starts from that same day — regardless of whether the buyer has actually inspected or approved the goods. For businesses with high-volume MSME procurement and quality-control processes that take more than 15 days, this “deemed acceptance” provision can move the deadline earlier than expected. Always document inspection outcomes and communicate disputes in writing within 15 days of delivery.
The Double Consequences of Delayed Payment
When a buyer delays payment beyond the MSMED Act deadline, two separate sets of consequences run simultaneously — one under the MSMED Act (commercial law) and one under the Income Tax Act (tax law). They are distinct, additive, and neither can be escaped by settling the other.
Consequence 1 — Compound Interest (MSMED Act)
Section 16 of the MSMED Act: Compound interest on the outstanding amount at three times the Reserve Bank of India bank rate from the date of non-payment. As of June 2026, with the RBI bank rate at approximately 6.75%, this translates to interest at around 20.25% per annum, compounding monthly. This is commercially crippling if allowed to accumulate.
Consequence 2 — Interest is NOT Tax-Deductible
Section 23 of the MSMED Act expressly provides that interest payable or paid under Section 16 shall not be allowed as a deduction for income tax purposes. This means the buyer bears the full economic cost of the interest without any tax relief — effectively making the real cost of delayed payment even higher than the nominal interest rate suggests.
Consequence 3 — Deduction Deferred (IT Act)
Section 43B(h) of IT Act: The principal expense itself (the purchase price of goods or services) is disallowed as a deduction in the year of accrual if not paid within the MSMED Act timeline. The disallowed expense is added back to taxable income for that year. The deduction then becomes available only in the year the payment is actually made.
Consequence 4 — Mandatory Disclosure
Delayed MSME payments must be disclosed in the audited financial statements (note to accounts) per the Companies Act / Schedule III requirements, and separately in the tax audit report (Form 3CD Clauses 22 and 26). The disclosure creates a permanent public record that can invite scrutiny from the IT Department, statutory auditors, and the Micro and Small Enterprises Facilitation Council (MSEFC).
Cost illustration — ₹50 lakh payment delayed by 6 months to an MSE (no agreement)
Worked Examples — Deduction Timing Across Different Scenarios
The following examples illustrate how the deduction timing works across the most common real-world situations. In all examples, the buyer (Company A) is not an MSME; the supplier (Supplier B) is a registered Micro Enterprise (manufacturer).
Example 1 — Payment within 45 days (written agreement): Fully compliant
Example 2 — Late payment but before 31 March: Deduction saved, but interest applies
Example 3 — Payment after 31 March: Deduction deferred to next year
Example 4 — Agreement exceeds 45 days: Treated as no agreement; 15-day rule applies
🎓 Practitioner’s Note — The “paid before year-end” safe harbour
Section 43B(h) does not disallow every late payment — it disallows only those that remain unpaid as of 31 March of the relevant financial year. If the buyer pays after the 15/45-day statutory deadline but before 31 March, the expense is still deductible in that financial year. However, the MSMED Act interest continues to run from the day after the statutory deadline to the date of actual payment — and this interest is always non-deductible. The tax disallowance and the MSMED interest are thus separate. Advise clients to prioritise clearing all MSME outstanding before 31 March every year — even if it means delaying payments to non-MSME vendors.
Tax Audit — Form 3CD Clause 22 & Clause 26
The Finance Act 2023 amendment was accompanied by a corresponding amendment to Form 3CD — the statement of particulars annexed to the tax audit report under Section 44AB. CBDT Notification No. 27/2024 (dated 5 March 2024) revised Form 3CD to explicitly capture MSME payment data. Two clauses in Form 3CD are now directly relevant to Section 43B(h).
Clause 22 — MSME payables & interest
Requires disclosure of all amounts payable to Micro and Small Enterprises as at year-end, with a breakup showing: (a) amounts outstanding within the statutory period, (b) amounts outstanding beyond the statutory period, and (c) interest accrued/payable under Section 23 of the MSMED Act that is inadmissible as a tax deduction.
Clause 26 — Disallowances under Section 43B(h)
Requires the auditor to specifically report: “Amounts debited to the profit and loss account, being sums payable to micro or small enterprises beyond the time limit specified in Section 15 of the MSMED Act, 2006.” The auditor must report amounts still outstanding as of year-end that are due to MSEs beyond the statutory deadline — these are the Section 43B(h) disallowable amounts.
What the Tax Auditor Must Verify
Obtain and verify the complete MSME vendor list
The auditor must obtain from the auditee a complete list of suppliers classified as Micro or Small Enterprises under the MSMED Act (with their Udyam Registration numbers). Verify each certificate to confirm: (a) the registration is valid and active, (b) the enterprise category (Micro/Small — not Medium), and (c) the nature of activity (manufacturer/service provider — not trader). The auditor cannot simply rely on the auditee’s self-certificate without independent verification from the Udyam portal.
Identify all invoices from eligible MSE suppliers and map payment dates
For each invoice from an eligible MSE, determine: the acceptance date (or deemed acceptance date), the applicable payment deadline (15 or 45 days), and the actual payment date. Where goods were returned or disputed, document the written objection raised within 15 days to establish revised acceptance dates.
Classify outstanding amounts as at 31 March
As at the year-end balance sheet date: amounts still outstanding to MSEs that have crossed the statutory deadline are the Section 43B(h) disallowable amounts. Amounts within the statutory period as at 31 March are not disallowable (even if technically “late” — since they have not crossed the deadline yet as at year-end). Report the breakdown in Clause 22 and the disallowable amount in Clause 26.
Compute and disclose inadmissible interest
Calculate interest payable under Section 16 of the MSMED Act on all delayed payments — from the day after the statutory deadline to the date of actual payment (or year-end for still-outstanding amounts). This interest — whether accrued or paid — must be disclosed in Clause 22 and is NOT deductible. If the auditee has not accrued this interest in the books, bring it to management’s attention for correct accounting treatment and note disclosure in financial statements.
Add back disallowed amounts in tax computation
The aggregate Section 43B(h) disallowable amount (MSE payments outstanding beyond the statutory deadline as at 31 March) must be added back to income in the tax computation annexed to the return. This amount becomes deductible in the next financial year when actually paid. Maintain a working paper tracing each disallowed invoice to its eventual payment date.
CPC will auto-disallow — even if the auditor misses it
The Central Processing Centre (CPC) of the Income Tax Department has been configured to automatically identify and disallow MSME-related outstanding amounts reported in the tax audit data that has not been correspondingly added back in the ITR computation. Do not assume that a failure to disclose in Clause 26 will allow the deduction to slip through — the system will flag the mismatch. A better audit trail and pre-emptive voluntary addition back is always safer than relying on the CPC to miss it.
Position Under the Income Tax Act, 2025
With the Income Tax Act, 2025 having come into effect from Tax Year 2026-27 (1 April 2026), Section 43B of the 1961 Act has been renumbered. The MSME payment provision — old Section 43B(h) — is now found under Section 37(2)(g) of the Income Tax Act, 2025.
| Aspect | IT Act 1961 Reference | IT Act 2025 Reference | Change in Substance |
|---|---|---|---|
| MSME payment deduction timing | Section 43B(h) | Section 37(2)(g) | None — substantively identical |
| Link to MSMED Act payment deadline | Section 15, MSMED Act 2006 | Section 15, MSMED Act 2006 | Unchanged |
| Non-deductibility of MSMED interest | Section 23, MSMED Act 2006 | Section 23, MSMED Act 2006 | Unchanged |
| Form 3CD reporting (Tax Audit) | Clause 22 / Clause 26 (Form 3CD) | Equivalent clauses in revised Form 3CD under IT Rules 2026 | Revised section citations; data requirements same |
| Applicable from TY 2026-27 onwards | N/A (1961 Act superseded) | Section 37(2)(g) applies for TY 2026-27 onwards | Cite new section in returns, audit reports, and notices from TY 2026-27 |
Practical implication: For FY 2024-25 (AY 2025-26) and FY 2025-26 (AY 2026-27) tax audits and assessments, cite Section 43B(h) of the IT Act 1961. For TY 2026-27 (first year under IT Act 2025) and onwards, all references in Form 3CD, tax computations, and correspondence with the Department must use Section 37(2)(g) of the IT Act 2025. The underlying obligation is identical — only the section number changes.
Contested Issues & Litigation Risks
Section 43B(h) is now in its third year of operation (AY 2024-25, AY 2025-26, AY 2026-27). While the central provision is clear, several interpretational issues have emerged in practice that are actively contested between taxpayers, auditors, and the Department. The following issues carry the highest litigation risk and deserve particular attention from practitioners.
Supplier registered as trader — liability for buyer?
The Department may take the position that the buyer must independently verify whether the supplier qualifies as a “supplier” under the MSMED Act (i.e., whether they are a manufacturer/service provider or trader). If the buyer has not done this diligence and the supplier turns out to be a trader whose Udyam certificate shows trading activity, the question arises: is the buyer still protected from disallowance? The prevalent view is that the trader exclusion protects the buyer — but this has not been tested in courts yet.
Risk: High · Mitigation: Verify the “Type of Enterprise” field in Udyam Certificate for every MSE supplier
Supplier did not inform buyer of MSME status
A significant number of MSME suppliers began including their Udyam registration numbers on invoices only after the amendment was publicised. For invoices prior to this — or for MSE suppliers who have never disclosed their registration — the buyer may argue that no disallowance can arise since they had no knowledge. The CBDT’s FAQ document (although informal) supports this position. However, the Department may argue that ignorance of a supplier’s registration status does not exempt the buyer.
Risk: High · Mitigation: Build supplier MSME status verification into procurement onboarding; collect Udyam certificates from all vendors proactively
Opening balances as of 1 April 2023 — year-end 2024 treatment
Amounts outstanding to MSEs that predated 1 April 2023 (when the provision was announced) but remained unpaid on 31 March 2024 were the subject of significant debate. Were these “grandfathered”? The answer, from a plain reading of the provision, is no — Section 43B(h) applies to sums “payable” as at the year-end, irrespective of when the liability arose. Outstanding balances as on 31 March 2024 that remained unpaid and were due to MSEs beyond the statutory deadline were disallowable for AY 2024-25.
Risk: Medium — largely settled for AY 2024-25 · Still relevant for legacy balances in ongoing assessments
Can auditor rely on assessee’s own MSME certificate?
When an assessees provides a list of MSME suppliers with their Udyam certificates, can the tax auditor simply rely on this without independent verification? The Institute of Chartered Accountants of India (ICAI) guidance suggests the auditor must verify directly from the Udyam portal (udyamregistration.gov.in) for a representative sample. Sole reliance on management certificates without verification exposes the auditor to a qualified opinion situation and professional risk under the Code of Ethics.
Risk: Medium — auditor professional risk if disallowances discovered post-audit
TDS deduction ≠ payment for Section 43B(h)
A nuanced but important point: where TDS has been deducted on an MSME payment and deposited with the government, the net amount paid to the supplier is not the full invoice value. Does deducting TDS constitute “payment” for the purposes of Section 43B(h)? The settled position is that TDS deduction alone is not “payment” — the full gross amount must be paid (net to supplier + TDS to government) within the statutory timeline for the deduction to be allowed. Businesses that deduct TDS but delay the net payment to the supplier still fall foul of Section 43B(h).
Risk: Medium — common mistake in businesses with TDS-applicable MSME transactions
Disputed invoices and purchase returns — is the clock suspended?
Where the buyer raises a written dispute within 15 days of delivery, the “acceptance” date shifts to the date on which the dispute is resolved and goods are accepted. However, if no written objection is communicated within 15 days, deemed acceptance has occurred and the clock runs from delivery — even if the dispute is raised later. Businesses with quality-control processes exceeding 15 days are particularly vulnerable to deemed-acceptance traps, especially where disputes are verbal and not documented in writing.
Risk: Medium · Mitigation: Always raise written objections within 15 days of delivery for any disputed supply
Post-year-end payment — which year’s deduction?
Amounts disallowed under Section 43B(h) in Year 1 because they were not paid by 31 March become deductible in Year 2 “in the year of payment.” If the payment is made in April of Year 2, the deduction shifts cleanly to Year 2. However, if the buyer makes partial payments, the deduction is allowed proportionately in the year each instalment is paid. Tracking deferred deductions across years requires robust accounting — and failure to claim the deferred deduction in the correct year (instead of re-adding it back again) is an emerging compliance error.
Risk: Emerging — arising from accumulated deferred deductions across AY 2024-25, AY 2025-26
MSME status changes mid-year — buyer’s liability
If a supplier was a Micro Enterprise at the time of purchase but crossed the investment/turnover threshold and reclassified as Medium Enterprise by year-end, does Section 43B(h) apply to outstanding payments to them? The provision applies based on status at the time of supply — if the supplier was a Micro or Small Enterprise when goods were supplied, the buyer’s obligation under Section 15 MSMED Act crystallised at that point. Subsequent reclassification does not retrospectively undo the payment obligation or the tax consequence of delayed payment.
Risk: Emerging — increasingly relevant as MSMEs cross turnover thresholds post-GST data transparency
Intersection with MSEFC — facilitation council complaints
The Micro and Small Enterprises Facilitation Council (MSEFC) set up under the MSMED Act has jurisdiction to hear and decide disputes relating to delayed payments. MSE suppliers who have not been paid can file a complaint with the MSEFC — independently of any income tax proceeding. An MSEFC award against the buyer creates a separate legal liability for the delayed payment plus interest, enforceable as a decree. The Tax Audit Form 3CD disclosure of delayed MSME payments can itself become the evidence base for an MSEFC complaint — particularly now that suppliers and their associations are becoming more aware of their rights under the MSMED Act.
Year-End Compliance Checklist
The following checklist should be executed by every business with MSME suppliers before 31 March each year — and again during the tax audit preparation phase. It is designed both for the finance team (pre-year-end) and for the CA firm (audit phase).
For the Finance / Accounts Team — Before 31 March
- Maintain a dedicated register (or ERP report) of all MSME suppliers with their Udyam Registration number, enterprise category (Micro/Small), and nature of activity (manufacturer/service provider — not trader).
- Verify each supplier’s Udyam Registration status directly from udyamregistration.gov.in at least once a year — registration can be cancelled or category can change.
- For every invoice from an eligible MSE supplier, record: invoice date, delivery/acceptance date, any written objection within 15 days, agreed credit period, statutory payment deadline, and actual payment date.
- In January–March each year, run an “MSME outstanding” report identifying all invoices from MSE suppliers that will breach the 15/45-day limit before 31 March — and prioritise payment clearance of these.
- Compute MSMED Act interest (3× RBI bank rate, compounding monthly) on all delayed payments and accrue it in the books — even if not yet claimed by the supplier. Disclose in the financial statement notes.
- Do NOT enter into payment agreements with MSME suppliers that purport to allow credit periods exceeding 45 days — these are void and can expose the business to both MSMED interest and Section 43B(h) disallowance simultaneously.
- Ensure that TDS deducted from MSME payments does not delay the net payment — pay the net amount to the supplier within the statutory timeline alongside depositing TDS to the government.
For the CA / Tax Auditor — During Audit
- Obtain the MSME vendor master from the client with Udyam Registration certificates for each supplier — independently verify on the Udyam portal for a representative sample.
- Pull the complete accounts payable ageing as at 31 March — identify all MSE supplier outstanding amounts beyond the statutory deadline. This is the Section 43B(h) disallowable amount.
- Verify that the disallowable amount has been added back in the tax computation — and that deductions claimed for amounts paid in the current year include any amounts disallowed in the previous year (now paid).
- Report correctly in Form 3CD Clause 22 (MSME payables and inadmissible interest) and Clause 26 (Section 43B(h) disallowance). Do not merge these disclosures.
- Where the client has not maintained MSME vendor records, qualify the audit report as necessary and recommend immediate vendor master cleanup.
- Maintain working papers documenting invoice-by-invoice analysis for the top 80% of MSE payable value — this forms the basis of your Clause 26 disclosure and is essential if the assessment is reopened.
Frequently Asked Questions
| Question | Answer |
|---|---|
| Does Section 43B(h) apply to a buyer who is itself an MSME? | Yes. The provision applies to all assessees making payments to Micro or Small Enterprises — irrespective of the buyer’s own MSME status. An MSME buying from another MSME is equally subject to the 15/45-day rule and the disallowance provision. |
| Does it apply to services as well as goods? | Yes. Section 43B(h) covers both goods supplied and services rendered by Micro or Small Enterprises. Professional services, job work, IT services, construction support — all are covered if the provider is a registered Micro or Small Enterprise (not a trader). |
| What if there is no written agreement and no formal acceptance process? | If there is no written agreement, the 15-day rule applies from the date of delivery (or deemed acceptance — 15 days from delivery if no objection raised). Where there is no formal acceptance process, the date of delivery is typically treated as the date of acceptance. |
| Does the provision apply to capital expenditure purchases from MSEs? | Yes — where deductions for capital expenditure are permitted under Sections 30 to 36 of the IT Act (now equivalent provisions under IT Act 2025), Section 43B(h) applies to ensure that the deduction is allowed only on actual payment within the MSMED Act timeline. This includes depreciation-eligible capital assets purchased from MSEs. |
| If an MSME supplier’s Udyam registration is cancelled after the supply but before payment, does Section 43B(h) still apply? | The obligation under Section 15 of the MSMED Act crystallised at the time of supply — when the supplier was a registered MSE. Subsequent cancellation of registration does not undo the payment obligation that had already arisen. The Section 43B(h) consequence should still apply to payments delayed beyond the original statutory deadline. |
| Can a contract contain a grace period or cure period for late payment to avoid Section 43B(h)? | No. Contractual clauses that purport to extend the payment period beyond 45 days, or that provide a “grace period” after the 45-day cap, are void under the MSMED Act. The statutory maximum is 45 days from acceptance — no contract can override this for a Micro or Small Enterprise supplier. |
| What is the current RBI bank rate for computing MSMED interest? | The RBI bank rate (also called the Bank Rate) is set by the Reserve Bank of India and revised periodically as part of monetary policy. The compound interest payable under Section 16 of the MSMED Act is three times this rate. Always check the current RBI bank rate at rbi.org.in before computing interest — do not use an outdated rate from prior-year computations. |