CBDT Directs Officers to Disallow Interest Deductions Under MSMEDA for Accurate Tax Computation.
The Central Board of Direct Taxes (CBDT) instructs assessing officers not to allow deductions for interest paid or payable under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA) when computing income tax. Sections 22 and 23 of the MSMEDA require buyers to disclose principal and interest amounts separately in their annual accounts, facilitating accurate disallowance of interest as a deductible expense. The Act defines "suppliers" as micro or small enterprises and outlines investment thresholds for micro and small enterprises in manufacturing and service sectors. Assessing officers are directed to enforce these provisions effectively.
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