Udyam registration is free and online, based on Aadhaar and PAN. Classification uses both investment in plant and machinery and turnover. From 1 April 2025, micro enterprises have investment up to ₹2.5 crore and turnover up to ₹10 crore. Small enterprises go up to ₹25 crore and ₹100 crore, and medium up to ₹125 crore and ₹500 crore.
Under Section 43B(h), a buyer can deduct amounts owed to micro and small enterprise suppliers only when paid within the time allowed: 45 days with a written agreement, or 15 days without one. Unpaid amounts are allowed only in the year of payment.
Key points
- Registration helps with priority lending and delayed-payment protection
- Buyers should track MSE supplier dues at year-end
- Update Udyam details when investment or turnover changes
General information only, not professional advice. Section references are to the Income-tax Act, 1961; corresponding provisions of the Income-tax Act, 2025 apply from 1 April 2026. Thresholds and dates may change by notification.
