Taxmann’s MSME Ready Reckoner

This comprehensive handbook offers an in-depth analysis of India’s regulatory, financial, and operational landscapes for Micro, Small, and Medium Enterprises (MSMEs). It also discusses Section 43B(h) of the Income-tax Act, 1961, focusing on timely payments to MSE suppliers. It also provides detailed reckoners for enterprises of different sizes, highlighting turnover-limit-linked compliances and exemptions. Each section of the book addresses various aspects of MSME operations, from Udyam registration to legal classifications and the benefits of formalization. The text further elaborates on the advantages of being a registered MSME, such as access to MSME funds, remedies against delayed payments, and exemptions under various central schemes. Legal forms suitable for each business size, the implications of different organizational structures, and sector-specific financial aids like the MUDRA scheme are also comprehensively covered.

For entrepreneurs and business owners, this guide is essential to understand the complexities of managing an MSME in India, ensuring they are well-equipped to optimize their business operations and comply with pertinent legal requirements.

The Present Publication is the 5^th Edition | 2024 and has been updated till 1^st April 2024. This book is authored by Taxmann’s Editorial Board, with the following noteworthy features:

• [Overview of Section 43B(h)] Practical insights into identifying micro, small, and medium enterprise (MSME) suppliers covered under Section 43B(h) of the Income-tax Act, including a guide on checking Udyam Certificates
• [Reckoner Guides] Detailed reckoners for micro, small, and medium enterprises outlining turnover-linked compliances and exemptions, covering different organizational structures such as private companies, limited liability partnerships, traditional partnerships, individual/HUF, and public companies
• [MSME Definition, Classification, and Registration]
  • A comprehensive definition of micro, small, and medium enterprises,
  • Methodologies for computing investment and turnover
  • New composite criteria for MSME classification with illustrations and case studies
  • Steps for filing Udyam registration and using the Udyam Assist Platform
  • Guidelines on reclassification and differentiation between manufacturing and service MSMEs
• [Benefits to Registered MSMEs]
  • Overview of benefits from the MSME Fund and remedies against delayed payments under the MSMED Act
  • Legal and financial support like the Factoring & Trade Receivables Discounting System (TReDS) and other central schemes
  • Specific chapters on recovery of dues, half-yearly returns, and the insolvency resolution process for corporate MSMEs
• [Benefits to Small Businesses (Registered MSMEs or Not)]
  • Tax benefits and exemptions under the Income-tax Act, including low tax rates and exemptions from compulsory tax audits
  • Relaxations in compliance requirements under the Companies Act and access to funding schemes like MUDRA and PM SVANidhi for street vendors
  • Quick online loan approval processes for MSMEs
• [Legal Forms of Organization for MSMEs] Understanding of different legal forms MSMEs can adopt, such as sole proprietorships, partnerships, limited liability partnerships (LLP), companies, and Hindu Undivided Families (HUF)
• [Specific Enterprise Guides] Detailed descriptions and registration processes for micro, small, and medium enterprises, emphasizing the suitable legal forms for each category
• [Importance of Filing ITRs] The significance of filing income tax returns for small businesses and their owners, highlighting the legal and financial implications
• [Start-Up Focus] Definition and benefits for DPIIT-recognized start-ups under the Start-Up India Scheme, providing a pathway for emerging businesses

The detailed contents of this book are as follows:

• MSMEs – Definition, Classification, and Registration
  • This section analyses the new definitions of ‘Micro, Small, and Medium Enterprises,’ how to compute investment and turnover, and the classification of MSMEs with illustrations and case studies. It also covers Udyam Registration processes, formalization through the Udyam Assist Platform, reclassification protocols for MSMEs, and differentiates between manufacturing and service MSMEs
• Benefits to Registered MSMEs
  • Discusses various benefits MSMEs can avail from government funds, protections against delayed payments, the promotion of timely payments as mandated by Section 43B(h) of the Income-tax Act, and other central schemes. It also highlights compliance relief in financial reporting, the Trade Receivables Discounting System (TReDS), and introduces the pre-packaged insolvency resolution process
• Benefits to Small Businesses
  • Focuses on tax benefits, compliance relaxations, and financial support schemes available to small businesses, whether or not they are registered as MSMEs, including the MUDRA scheme for non-corporate small business sectors and PM SVANidhi for street vendors
• Legal Forms of Organisation
  • Examines the various legal forms of organization that MSMEs can adopt, outlining the pros and cons of each, including sole proprietorships, partnerships, limited liability partnerships, companies, and Hindu Undivided Families
• Micro, Small, and Medium Enterprises
  • These divisions individually define and describe the suitable legal forms of organization for micro, small, and medium enterprises, alongside detailing the registration processes for each category
• Importance of Filing ITR for Small Businesses and Their Owners
  • Highlights the critical role of filing income tax returns for small businesses and their owners, emphasizing the benefits and legal requirements
• Start-up
  • It concludes with a focus on start-ups, defining what constitutes a start-up and outlining the benefits available to DPIIT-recognized start-ups under the Start-up India Scheme