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Under section 43B(h), a sum payable to a micro or small enterprise is deductible on accrual only if it is paid within the time allowed under section 15 of the MSMED Act, which is:
A30 days always, whether or not there is a written agreement
B60 days with a written agreement, and 30 days without one
CThe end of the financial year in which the supply was made
D45 days at most with a written agreement, else 15 days
Answer & Solution
Correct answer: D. 45 days at most with a written agreement, else 15 days
1. Section 43B(h) covers sums payable to micro and small enterprises (not medium enterprises).
2. Section 15 of the MSMED Act allows payment within the agreed period capped at 45 days where a written agreement exists, and within 15 days where there is none.
3. Payment within these limits preserves the accrual-year deduction; payment beyond them shifts the deduction to the year of actual payment.
4. Unlike the other clauses of section 43B, payment by the return-filing due date does NOT save the accrual deduction for clause (h).
_Source: ICAI CA Inter P3(A) Income-tax SM (May 2026), Ch 3 Unit 3 PGBP, PDF p. 102_
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