Statutory compliance and cash transactions
Clauses 22 to 31: MSME payments, section 43B, related parties, and cash loans and receipts.
Clauses 22 to 31 — statutory dues, related parties, and transactions the Act restricts by mode. Wizard steps 6 and 7.
MSME Payments (Clause 22)
Interest inadmissible under section 23 of the MSMED Act, and — under section 43B(h) — amounts owed to micro and small enterprises beyond the permitted period.
Warning
Section 43B(h) disallows the amount itself, not merely interest on it, where a micro or small supplier is paid late. Whether a supplier qualifies depends on their registration, which is not in your client's ledger — it has to be established from the suppliers themselves.
The Connector reports an MSME flag where Tally carries one, but Tally's flag is only as current as whoever maintained it.
Payments to Specified Persons S.40A(2)(b) (Clause 23)
Payments to persons specified in section 40A(2)(b) — relatives, related concerns, persons with a substantial interest.
Identifying them is a matter of the relationships behind the ledger, not of the ledger itself.
Deemed Profits (Clauses 24, 25)
- Clause 24Sections 32AC, 32AD, 33AB, 33ABA, 33AC
Amounts deemed to be profits.
- Clause 25Section 41
Any amount of profit chargeable, with its computation.
Section 43B Compliance (Clause 26)
Statutory dues — tax, duty, cess, provident fund, ESI, bonus, leave encashment — analysed by whether they were outstanding at the start or incurred during the year, and whether they were paid before the due date for filing.
Note
The clause turns on the date of payment, which a closing balance does not show. A liability discharged after the year end but before the return is due is treated differently from one still outstanding.
CENVAT / ITC Adjustments (Clause 27)
Credit availed of or utilised, its treatment in the accounts, and prior-period items credited or debited to the profit and loss account.
Forfeited Amounts & Gifts (Clauses 29A, 29B)
- Clause 29ASection 56(2)(ix)
Advance received and forfeited in respect of a capital asset.
- Clause 29BSection 56(2)(x)
Consideration for property or shares received without, or for inadequate, consideration.
Hundi, Transfer Pricing & GAAR (Clauses 30, 30A–30C)
Amounts borrowed or repaid on a hundi otherwise than by account payee cheque; primary adjustments under section 92CE; interest limitation under section 94B; and impermissible avoidance arrangements under the GAAR provisions.
Cash Loans / Deposits / Receipts (Clause 31)
Transactions under sections 269SS, 269T and 269ST — loans and deposits accepted or repaid, and receipts, otherwise than by the prescribed modes.
Note
Section 269ST catches receipts aggregated per person per day, per transaction, and per event. A series of small receipts that each look acceptable can breach it in aggregate, which is not something a ledger scan will surface.
The particulars wanted are per party: name, address, PAN, amount, and the mode.
Last updated 31 Aug 2026
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