Revised Classification Limits for MSME Sector

The Micro, Small and Medium Enterprises Development Act (MSMED), 2006 was enacted to support the creation and development of MSMEs. In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced a major update to the New MSME classification, increasing the investment limit by 2.5 times and doubling the turnover limits. The revised MSME criteria comes into effect from April 1, 2025.

In light of this revised MSME classification thresholds, companies and businesses engaged in transactions with MSMEs must be particularly mindful of the updated limits. This is crucial due to the provisions of Section 43B(h) of the Income Tax Act, 1961, which disallows deductions for delayed payments to Micro and Small Enterprises (MSEs). 

To access the detailed alert please click here MSME Revised limits