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Bills from micro and small suppliers run on a clock

Pay a micro or small supplier after its due date and after the year you booked the bill has closed, and Section 43B(h) moves the deduction to the year you pay. Try one bill below.

Try one bill

This is a sample bill. Change anything, or

Today by default.
Written agreement on terms?
Paid yet?
More details
As the supplier's Udyam certificate shows for the date of supply.
Or the day a written objection was resolved. Empty counts from the invoice date.
Up to 45 with a written agreement, 15 otherwise. Set aside if you answered No.
25.168 is the 22 percent company rate with surcharge and cess, section 115BAA, now section 200 of the Income-tax Act 2025.

Three dates decide the deduction

  1. Day 0 The supply is delivered

    The clock starts on the day the goods are delivered or the service is done. If you object in writing within 15 days, it starts on the day the supplier resolves the objection.

  2. Day 15, or up to 45 The bill falls due

    15 days after acceptance, or the day a written agreement sets, never more than 45 days after acceptance. From then on interest runs at three times the RBI bank rate, compounded monthly. It is owed to the supplier and never deductible.

  3. 31 March The year closes

    A bill still unpaid on 31 March and paid after its due date is disallowed for the year, even when the due date falls after 31 March. It is allowed in the year you pay. Paid late but on or before 31 March, it stays deductible.

The bank rate is 5.75 percent from 7 October 2026, so interest on a late bill now runs at 17.25 percent a year, compounded monthly. MSMED Act 2006 sections 15, 16 and 23. Income-tax Act 2025 section 37(2)(g), which replaced section 43B(h) of the 1961 Act from 1 April 2026.

The app checks a whole ledger in one run

A Windows app for finance teams and CA firms. It reads your payables, finds the suppliers that are micro or small on Udyam, and works out every bill the way the calculator above does.

The SettleClock app after screening a ledger. It shows the expense deduction at risk this financial year in large figures, a bar splitting it by how soon each part falls due, the tax cost, the MSMED interest accrued and the share of payables owed to micro and small suppliers.
The app after screening a synthetic ledger. Every company name and figure in these pictures is made up, and any likeness to a real business is a coincidence.

  1. Export your ledger

    The vendor master with PANs and the open bills or payables ageing, from Tally, SAP, Busy or Excel.

  2. Find the covered suppliers

    Each PAN is checked against Udyam records through a verification provider you hold an account with.

  3. Work out every bill

    A due date from each bill's own delivery date and terms, and the interest already running.

  4. Pay in the right order

    The amount at risk for the year, when each part falls due, and which suppliers to pay first.

What one run gives you

The pay-by register in the app. Suppliers past their payment date are listed first, each with the amount outstanding, overdue, at risk, the interest owed and when to pay.
The pay-by register.
A pay-by register
Every covered supplier, late ones first, with the date to pay by to keep the deduction.
The amount at risk and its tax cost
Split by how soon each part falls due, so you know how much deduction moves to next year if nothing is paid by 31 March.
The CA firm edition's printable working paper. It has the client, reference and period, blank lines for prepared by and reviewed by, and the deduction at risk with its split.
The CA firm edition's working paper.
Working papers for the accounts
The Schedule III MSME ageing, every Section 22 figure except interest you have paid, and a CSV to help a company prepare its half-yearly MSME-1 return.
A working paper per client
For CA firms, with sign-off lines and every assumption written on it.

Your ledger stays on your computer

Nothing from your books is uploaded to us. The app keeps the ledgers, reports, settings and licence in one folder on your machine.

Stays on your computer
The ledgers you add, every report, the settings and the licence. The app runs on your machine and keeps everything in one folder there.
Leaves your computer
When you check suppliers online, with each supplier's consent, its PAN and then the Udyam number found for it go to the verification provider whose keys you saved, on your own account with that provider. The update check, on unless you turn it off, sends the version number to our update address about once a day.
Reaches us
The update check, with the version number and your IP address. The details you give us to issue a licence. Never a ledger, a supplier's PAN, a report or a provider key, and there are no analytics, tracking or crash reports.
This page
The calculator runs in your browser. Nothing you type in it is sent anywhere. The site sets no cookies.

Who it is for

Finance teams

See the amount at risk before 31 March, while paying still saves it, and hand the auditors a Schedule III ageing that adds up to the ledger's total outstanding.

CA firms

Screen each client's payables for the tax audit and keep a working paper per client, with the assumptions behind each figure written on it.

A Windows app that needs Windows 10 or later. One edition for a company, one for a CA firm screening many clients, and one for a group of companies.

Questions

Anything else, write to hello@settleclock.com.

What is Section 43B(h)?

A rule in the Income-tax Act 1961, carried into section 37(2)(g) of the Income-tax Act 2025. An expense owed to a micro or small enterprise and paid later than the MSMED Act allows is deductible only in the year it is paid. Paid on time, or late but within the same year, it is deductible as usual.

When is a bill from a micro or small supplier due?

15 days after acceptance. Acceptance is the day the goods are delivered or the service is done. If you object in writing within 15 days of that, it is the day the supplier resolves the objection. A written agreement can set a shorter or longer period, but never more than 45 days from acceptance.

I paid late, but before the year ended. Is the deduction lost?

Not if you paid on or before 31 March of the year you booked the bill. The expense stays deductible for that year, and the supplier is still owed interest for the days you were late. A bill booked in one year and paid late in the next is disallowed for the first year and allowed in the second.

What does paying late cost?

Interest at three times the RBI bank rate, compounded monthly, owed to the supplier. It is never deductible. The bank rate is 5.75 percent from 7 October 2026, so 17.25 percent a year.

Does it apply to every supplier?

Only to micro and small enterprises registered on Udyam on the date of supply. Medium enterprises are outside it, and so are traders, whose Udyam registration counts for priority sector lending only. A supplier that moved up to medium keeps the MSMED Act's late-payment protection for three years. Whether Section 43B(h) still applies to it then is not settled.

What does the calculator not check?

The supplier's registration date, disputes over the goods, part payments, set-offs, GST you claim back as input credit, capital purchases and buyers taxed on a presumptive basis, such as under section 44AD. The app takes the registration date from the Udyam record and lists in its report everything it had to assume. Either way, have a qualified professional review a figure before it is filed.

Try the app on your own ledger this year

We are looking for a few companies and CA firms to use it on their own ledgers, free, during FY 2026-27. Write with a line on who you are and how many suppliers you pay.

Write to hello@settleclock.com

SettleClock gives a screening estimate. Have a qualified professional review the figures before anything is filed.