What is Udyam registration?
Reviewed by Ranga & Company
Udyam registration: Udyam registration is the free online registration that classifies a business as a micro, small or medium enterprise (MSME), unlocking benefits such as priority lending, subsidies and protection against delayed payments.
At a glance
- Portal
- udyamregistration.gov.in (free)
- Needs
- Aadhaar of the owner or authorised signatory, and the business PAN
- Micro
- Investment up to ₹2.5 crore and turnover up to ₹10 crore
- Small
- Investment up to ₹25 crore and turnover up to ₹100 crore
- Medium
- Investment up to ₹125 crore and turnover up to ₹500 crore
Why it matters for tax: section 43B(h)
If you buy from a registered micro or small enterprise, you must pay within 15 days, or within the agreed period up to 45 days. Otherwise, the expense is allowed for income tax only in the year you actually pay. Suppliers with Udyam registration get paid faster; buyers who are late pay more tax.
Other benefits
- Collateral-free loans and priority-sector lending
- Protection under the MSMED Act against delayed payments
- Concessions in government tenders and some state schemes
Common mistakes
- Paying for a 'Udyam certificate' through a lookalike paid website; the official portal is free
- Buyers ignoring the 45-day rule and losing the expense deduction
Frequently asked questions
Is Udyam registration free?
Yes. It is free on the official portal, udyamregistration.gov.in.
What is the 45-day payment rule?
Under section 43B(h), payments to registered micro and small suppliers made after 15 days, or after the agreed period of up to 45 days, are deductible only in the year actually paid.
Do traders get Udyam registration?
Yes. Retail and wholesale traders can register on the Udyam portal, mainly for priority-sector lending.
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