43B(h) MSME disallowance calculator, with the MSME-1 figures
Creditor bills in: the 43B(h) disallowance and MSMED interest, or the ROC's half-yearly MSME-1 return, from one upload.
- YOU BRING
- Creditor bills in Excel: supplier category, invoice date, amount and payment date
- YOU GET
- The 43B(h) disallowance with interest, or the MSME-1 figures, and an Excel
- YOUR DATA
- Read in your browser. The file is never uploaded.
Use the tool
- Add your file(you are here)
- Check the result(next)
- Download(next)
Interest is charged at three times the bank rate, compounded monthly. Check the current bank rate on rbi.org.in. The time limit legally runs from the day of acceptance; the invoice date is used unless you supply an acceptance date.
Creditor bills
Vendor, MSME category, invoice / acceptance date, amount. Payment date blank means unpaid. PAN is optional.
IN SHORT
What the MSME 43B(h) & MSME-1 checker does
The MSME 43B(h) and MSME-1 checker takes one list of creditor bills and runs two checks: the income-tax disallowance under section 43B(h) for payments to micro and small enterprises made after the 15-day or agreed 45-day limit, with interest under section 16 of the MSMED Act; and the ROC's half-yearly MSME-1 return, which only companies owing a micro or small supplier for more than 45 days from acceptance must file. It is free, runs in the browser and produces an Excel working paper for either.
Updated
43B(h) worked example: a bill paid after the year end
A small enterprise raises a bill in February. The agreement says 60 days, but the time limit for 43B(h) is capped, so the bill falls due before the year ends. Paid after 31 March, it is not deductible in this year.
- Supplier
- Kiran Engineering (Small)
- Invoice date
- 10/02/2026
- Amount
- ₹2,50,000
- Agreed credit days
- 60
- Paid on
- 20/04/2026
- Year end
- 31/03/2026
- The agreed period is capped, so the limit is 45 days. The bill was due on 27/03/2026, before the year end.
- It was paid 24 days after the due date, on 20/04/2026, which is after 31/03/2026.
- Verdict: Disallowed u/s 43B(h). Due 45 days after invoice, paid after year end. Deductible in the year of payment.
- Interest under section 16 of the MSMED Act, at three times a bank rate of 5.75% with monthly rests: ₹2,831. This interest is never deductible.
Disallowed this year: ₹2,50,000. Interest payable: ₹2,831.
MSME 43B(h) disallowance calculator: all six outcomes
Six made-up bills, each ending in a different outcome. The year end is 31/03/2026 and the check is run as on 01/04/2026. The time limit is 15 days with no written agreement; where terms are agreed, the agreed days are used up to a cap of 45.
| SUPPLIER | CATEGORY | INVOICE | AMOUNT | AGREED DAYS | PAID ON | DUE DATE | OUTCOME | WHY |
|---|---|---|---|---|---|---|---|---|
| Apex Industries | Medium | 15/12/2025 | ₹5,00,000 | 60 | unpaid | 29/01/2026 | Not covered | Medium: only micro and small enterprises are covered |
| Shree Packaging | Micro | 10/01/2026 | ₹2,50,000 | 30 | 05/02/2026 | 09/02/2026 | Paid in time | Paid within 30 days |
| Patel Fabrication | Small | 10/01/2026 | ₹1,80,000 | 30 | 20/03/2026 | 09/02/2026 | Paid late, same year | Paid 39 days late but within the year, so the expense is allowed. Interest is payable and not deductible. |
| Kiran Engineering | Small | 10/02/2026 | ₹2,50,000 | 60 | 20/04/2026 | 27/03/2026 | Disallowed u/s 43B(h) | Due 45 days after invoice, paid after year end. Deductible in the year of payment. |
| Desai Components | Micro | 10/03/2026 | ₹1,20,000 | 30 | 05/04/2026 | 09/04/2026 | Allowed: paid within limit | Outstanding at year end but paid within the time limit |
| Nair Tools | Small | 20/03/2026 | ₹90,000 | none | unpaid | 04/04/2026 | Pay by due date | Still within the time limit. Pay by the due date to keep the deduction in this year. |
MSME-1 half-yearly return: figures from your ledger
MSME-1 uses a flat 45 days from acceptance, with no 15-day default. It is a snapshot at the half-year end. A company must file only if some covered supplier is owed for more than 45 days. These are the four amounts for the half-year 1 October 2025 to 31 March 2026.
| AMOUNT ASKED FOR | BILLS | VALUE |
|---|---|---|
| Paid within 45 days | 1 | ₹1,00,000 |
| Paid after 45 days | 1 | ₹1,50,000 |
| Outstanding, up to 45 days | 1 | ₹80,000 |
| Outstanding, over 45 days | 1 | ₹90,000 |
| HALF-YEAR | ENDS | RETURN DUE |
|---|---|---|
| 1 April 2025 to 30 September 2025 | 30/09/2025 | 31/10/2025 |
| 1 October 2025 to 31 March 2026 | 31/03/2026 | 30/04/2026 |
43B(h) and MSME-1 Excel template: columns the checker reads
One list of creditor bills serves both checks. Column names are found by themselves. A template with sample rows is on the tool.
| COLUMN | NEEDED | ALSO READ AS |
|---|---|---|
| Vendor | Yes | vendor, supplier, party, creditor, ledger, name |
| MSME category | Yes | msme category, msme type, msme status, msme, enterprise type, category |
| PAN (optional) | No | pan, pan no, pan number, vendor pan, supplier pan |
| Activity (trader / manufacturer / service) | No | activity, nature of business, major activity |
| Invoice no | No | invoice no, invoice number, bill no, ref no, voucher no |
| Invoice / acceptance date | Yes | acceptance date, invoice date, bill date, date |
| Amount | Yes | amount, invoice value, bill amount, outstanding, value |
| Payment date | No | payment date, paid on, date of payment, paid date |
| Agreed credit days | No | agreed credit days, credit days, credit period, agreed days, terms |
STEP BY STEP
How it works
- List creditor bills in Excel with the supplier's MSME category, invoice or acceptance date, amount and payment date; PAN is optional. A template is provided.
- Choose "Income-tax 43B(h)" or "ROC MSME-1" at the top.
- For 43B(h), set the year end and RBI bank rate to see the disallowance and interest. For MSME-1, pick the half-year to see the four amounts the form asks for, whether the company must file, the due date and the supplier-wise list.
GOOD TO KNOW
Common questions
- Which suppliers are covered?
- Micro and small enterprises. Medium enterprises are not covered, and traders are generally outside section 15 of the MSMED Act; you can choose to include them.
- How is the time limit worked out for 43B(h)?
- 15 days where there is no written agreement, otherwise the agreed period capped at 45 days, counted from the invoice or acceptance date you give.
- Is a bill paid late but within the same year disallowed?
- No. The expense is allowed in the year of payment, which is the same year. Interest for the delay is still payable and is not deductible.
- Who must file MSME-1, and when?
- Since S.O. 2751(E) of 15 July 2024, only a company that owes a micro or small supplier for more than 45 days from acceptance. It is due by 31 October for April to September and by 30 April for October to March.
- How is MSME-1 different from the 43B(h) check?
- MSME-1 uses a flat 45 days with no 15-day default, and it is a snapshot at the half-year end that also reports what was paid during the half-year, within and after 45 days, as well as what is still outstanding. Check the live form on the MCA portal before filing, since MCA revises it.