Under the law --- section 43B(h) of the Income Tax Act --- whose impact would be felt for the first time this year, a business entity failing to pay its vendors registered as `micro’ or ‘small’ (MSE) within 45 of delivery, would not get the deduction of its purchase in the year of the purchase but can claim the deduction only in the year of ‘actual payment’. Thus, deduction disallowance for unpaid outstanding would increase the taxable income and tax of companies for FY24.
