Section 43B → Section 48
Certain deductions to be only on actual payment
Quick Answer
Section 43B of the Income Tax Act, 1961 (Certain deductions to be only on actual payment) corresponds to Section 48 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 43B
Provision Summary
Certain expenses (taxes, bank interest, employee dues) are allowed only on actual payment basis before filing ITR.
Sec 48
Provision Summary
Retained and Weaponized. The 45-day payment rule for Micro and Small Enterprises (MSMEs) is strictly enforced under Section 43B(h).
Key Changes & Highlights
- Payments to MSMEs beyond 45 days are completely disallowed in the current year and allowed only in the year of actual payment.
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Frequently Asked Questions
What does Section 43B of the Income Tax Act 1961 deal with?
Section 43B (Certain deductions to be only on actual payment) Certain expenses (taxes, bank interest, employee dues) are allowed only on actual payment basis before filing ITR.
What is the new section number for Section 43B under the Direct Tax Code 2025?
Section 43B of the ITA 1961 maps to Section 48 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 43B under the new tax code?
Section 43B is marked as "Retained" with status "Active". Impact: Critical - Drastically impacts working capital management and tax audit reporting.
What are the key changes to Section 43B under DTC 2025?
Payments to MSMEs beyond 45 days are completely disallowed in the current year and allowed only in the year of actual payment.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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