As a CA Finalist currently navigating my articleship in a mid-sized firm, I’m grappling with the practical implications of the newly inserted Section 43B(h) of the Income Tax Act, 1961. We have a manufacturing client, a non-MSME, who has significant outstanding payments to vendors registered under the MSMED Act, 2006. My concern arises from the varying interpretations I’m hearing regarding the date from which this provision applies for payment delays. Some suggest it’s effective for expenditures incurred from FY 2023-24, while others argue it impacts all outstanding payments as of 31st March 2024 if they pertain to goods/services received after 1st April 2023, regardless of when the expenditure was ‘incurred’. Specifically, if a vendor is registered after the invoice date but before 31st March 2024, does 43B(h) apply? The ICAI’s recent advisories clarify the ‘registered’ status but leave ambiguity on the ‘date of incurring expenditure’ versus ‘date of payment due’ for items prior to FY 23-24. This is crucial for our yearend tax audit preparations. What practical approach are fellow practitioners adopting to ensure compliance and avoid disallowances for existing outstanding balances?