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      Question

      As per the Finance Act 2023, what is the key stipulation

      introduced in Section 43B(h) of the Income Tax Act regarding payments to MSMEs?
      A Payments owed to MSMEs must be settled within 30 days to qualify for tax deductions Correct Answer Incorrect Answer
      B Payments to MSMEs will not qualify for tax deductions if they remain unpaid after 45 days Correct Answer Incorrect Answer
      C Payments owed to MSMEs will be automatically exempt from tax deductions after 45 days Correct Answer Incorrect Answer
      D Only purchases of goods from MSMEs are affected by the 45-day settlement rule Correct Answer Incorrect Answer
      E Larger entities will receive tax deductions for overdue payments to MSMEs Correct Answer Incorrect Answer

      Solution

        Section 43B(h) stipulates that if payments owed to MSMEs are not settled within 45 days, they will not qualify for tax deductions under the Income Tax Act until the payment is made. This is aimed at encouraging timely payments to MSMEs.

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