Zeal Consultancy - Blog #TaxZeal Consultancy - Blog #Taxhttps://www.zealconsultancy.co.in/blogs/tag/taxWed, 22 Apr 2026 17:44:15 +0530http://zoho.com/sites/<![CDATA[Overview of MSME Samadhaan Scheme]]>https://www.zealconsultancy.co.in/blogs/post/overview-of-msme-samadhan-schemeMSME Samadhan Scheme emerges as a critical safeguard, ensuring the stability of cash flows for MSE Enterprises by addressing payment delays and thereby harnessing their potential for sustained growth.]]>

Micro, Small and Medium Enterprise (hereinafter collectively referred to as “MSE Enterprises”) are flourishing across various sectors, playing vital roles in India’s economic development. These enterprises serve as catalysts for growth, fostering innovation, nurturing entrepreneurship, generating substantial employment opportunities, and crucially, promoting equitable wealth distribution by empowering local communities. Hence, the MSME Samadhaan Scheme emerges as a critical safeguard, ensuring the stability of cash flows for MSE Enterprises by addressing payment delays and thereby harnessing their potential for sustained growth.

Understanding of MSME Samadhaan Scheme

The MSME Samadhaan Scheme, initiated under the Micro, Small and Medium Enterprise Development (MSMED) Act of 2006 and launched in 2017, is designed to facilitate the timely recovery of payments owed by buyers to Micro, Small, and Medium Enterprises (MSMEs). By ensuring prompt payment settlements, the scheme creates a conducive environment for the growth and prosperity of MSMEs, enabling them to thrive and contribute more effectively to the economy.

Eligibility for MSME Samadhaan Scheme

Any Micro, Small, and Medium Enterprises having a valid UAM can file the application through the MSME Samadhan Portal [https://samadhaan.msme.gov.in/]. For classification between Micro, Small, and Medium Enterprises, refer to Section 7 of The Micro, Small and Medium Enterprises Development Act, 2006.

Process for filing a claim under MSME Samadhaan Scheme

A step-by-step process is mentioned below in the easiest language possible for your understanding:

  • Visit the MSME Samadhaan Portal (https://samadhaan.msme.gov.in/).
  • Click on ‘Case Filing for Entrepreneur/MSE Units.’
  • Choose your MSME registration type: Udyog Aadhaar Number or Udyam Registration Number.
  • Login with your registration number, mobile number (as per the registration certificate), and verify the one-time password sent to the registered mobile number or E-mail ID.
  • Fill the claim application with all the required information and attach relevant documents to prove your claim.
  • Submit the case for review by the MSME Samadhan team.
  • You’ll receive an acknowledgment of receipt of the complaint.
  • After successful submission of the application, an auto-generated notice will be sent to the Buyer mentioning the amount due and therefore ordering to pay within the stipulated time.

Documents required for filing a claim under MSME Samadhaan Scheme

  • Copies of Invoice(s) issued by the MSME Supplier.
  • Copies of the agreement or Purchase Order between the MSME supplier and the buyer, if an oral contract had happened then a written affidavit should be filed.
  • Proof of Delivery of Goods or Services by MSME Supplier.
  • Any other relevant documents supporting the claim of the MSME Supplier.

What if the buyer has not responded to or mutually settled the disputed amount within the stipulated time mentioned in the notice?

Conciliation proceedings under section 18(2): The MSME Facilitation Council turns the complaint into an MSME case if the buyer doesn’t pay or respond to the notice, and therefore such a case comes under the ambit of MSEFC. Once it becomes an MSME case, Section 18(2) allows for conciliation between the parties. The council can handle the conciliation process itself or refer to a conciliation institution for help. The rules from sections 65 to 81 of the Arbitration & Conciliation Act, 1996, apply to this dispute, treating it as if conciliation is initiated under part III of the Arbitration & Conciliation Act, 1996.

Arbitration proceedings under section 18(3): If conciliation under section 18(2) doesn’t work out or ends without a settlement, the MSME Facilitation Council sends the case to arbitration for resolution. The council can either handle the arbitration process itself or refer the case to an institution or center that offers alternate dispute resolution services for arbitration. The rules of the Arbitration & Conciliation Act, 1996, apply to these arbitration proceedings or disputes.

Appeal against decree, award, or order under section 19: Section 19 of the MSME Act allows for an application to set aside a decree, award, or order resulting from arbitration proceedings. The rules of the Arbitration and Conciliation Act of 1996 are applicable to alternate dispute resolution or arbitration initiated under the MSME Act. Therefore, an objection or application to set aside the decree, award, or order can be filed according to the provisions of section 34 of the Arbitration and Conciliation Act, 1996, in conjunction with section 19 of the MSME Act.


Execution of Arbitral decree, award, or order: The decree, award, or order can be executed as per the provisions of section 36 of the Arbitration and Conciliation Act, 1996.

    MSME Samadhaan vs. Insolvency & Bankruptcy Code, 2016 – Which Road to Recovery is suitable?

    Certainly! Let’s delve deeper into the factors to consider when deciding between MSME Samadhaan and filing an application under the Insolvency & Bankruptcy Code, 2016 (IBC):

    Nature of the Dispute

    MSME Samadhaan: This mechanism primarily addresses disputes related to delayed payments from buyers to MSMEs. It focuses on resolving these disputes through conciliation and arbitration, aiming to expedite the resolution process and ensure timely payments without resorting to insolvency proceedings. 


    IBC: Filing an application under the IBC is typically considered when the financial distress faced by the MSME is severe and other attempts to resolve the issue, such as negotiation and mediation, have failed. This route may be chosen if the dispute goes beyond delayed payments and involves broader financial difficulties or insolvency concerns.

    Willingness to Maintain Business Relationships

    MSME Samadhaan: If preserving business relationships with the defaulting party (buyer) is a priority and there’s a possibility of resolving the payment delay amicably, MSME Samadhaan may be preferred. It provides a structured mechanism for dispute resolution while aiming to maintain commercial ties. 


    IBC: Filing under the IBC is a more formal legal process that may strain business relationships, as it involves initiating insolvency proceedings against the defaulting party. This route is typically pursued when other avenues for resolution have been exhausted, and the priority is to recover outstanding dues rather than preserve relationships.

    Severity of Financial Distress

    MSME Samadhaan: This mechanism is suitable for addressing relatively minor payment delays or disputes where the financial health of the MSME is not severely compromised. It offers a quicker and less adversarial way to resolve disputes without escalating to insolvency proceedings. 


    IBC: Filing under the IBC is appropriate when the financial distress faced by the MSME is significant, and there’s a genuine risk of insolvency. If efforts to recover dues through other means have failed and the MSME’s survival is at stake, initiating insolvency proceedings under the IBC may be necessary to protect the interests of creditors and stakeholders.

    Legal Implications and Processes

    MSME Samadhaan: The process under MSME Samadhaan involves conciliation and arbitration as per the provisions of the MSME Act. It is a relatively straightforward process focused on resolving payment disputes between parties. 


    IBC: Filing an application under the IBC entails adhering to the legal requirements and procedures prescribed under the Code. It involves the appointment of insolvency professionals, admission of the application by the National Company Law Tribunal (NCLT), and subsequent resolution or liquidation proceedings as per the provisions of the IBC.

    Synopsis

    The decision between MSME Samadhaan and filing under the IBC depends on factors such as the nature and severity of the dispute, willingness to preserve business relationships, and the legal implications involved. It’s essential to carefully assess the specific circumstances of the case and seek expert advice to determine the most appropriate course of action.


    Facts & Figures of MSME Samadhaan Portal (as on 05th May 2024): 

    Total Application Filed: 1,88,321 Cases 

    Cases mutually settled: 17,374 Cases 

    Therefore, Cases Transferred to MSEFC: 1,70,947 Cases 

    Cases disposed by MSEFC: 35,778 Cases 

    Cases under observation of MSEFC: 38,838 Cases 

    Cases yet to be viewed by MSEFC: 47,797 Cases 

    Application Rejected by MSEFC: 48,534 Cases


    Based on the data, it’s evident that the MSME Samadhaan portal isn’t operating at peak effectiveness currently. However, it’s still proving beneficial for MSE Enterprises by facilitating the recovery of stalled payments and monitoring delays. Looking ahead, there’s optimism for enhanced efficiency from the MSME Samadhaan Portal in the future.


    To know more, click on the below tab and schedule a consultancy.

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    ]]>    Mon, 06 May 2024 08:18:48 +0000    <![CDATA[Why Many Taxpayers Still Find the Old Tax Regime Attractive: 8 Compelling Reasons]]>https://www.zealconsultancy.co.in/blogs/post/why-many-taxpayers-still-find-the-old-tax-regime-attractive-8-compelling-reasonsWhen determining how to calculate your taxes, the choice between the old and new tax regimes can significantly impact your financial outcome.]]>

    Exploring Tax Options: Old vs. New Regime

    When determining how to calculate your taxes, the choice between the old and new tax regimes can significantly impact your financial outcome. While the new tax regime boasts lower income tax rates, the old tax regime offers a plethora of avenues for claiming higher income tax exemptions and deductions. Let's delve into why the old tax regime remains a compelling choice for many taxpayers in specific income brackets.

    1. Higher Deductions and Exemptions

    Under the old tax regime, taxpayers can benefit from various deductions and exemptions, substantially reducing their taxable income. This is particularly advantageous for individuals eligible for specific deductions.

    2. Tax Saving and Investment Opportunities

    The old tax regime provides a dual advantage of tax savings and investment incentives. Encouraging regular investments, this regime rewards taxpayers through tax-saving instruments such as PPF or ELSS, offering deductions of up to Rs 1.5 lakh under Section 80C.

    3. Affordable Financial Protection

    Paying premiums for insurance policies can lead to significant deductions under the old tax regime. Taxpayers can claim deductions of up to Rs 1.5 lakh for life insurance premiums under Section 80C, along with additional deductions for health insurance premiums.

    4. Retirement Planning Benefits

    Investing in the National Pension System (NPS) through your employer can substantially lower your taxable income. The old tax regime presents broader opportunities for tax savings through NPS contributions.

    5. Tax Benefits on Allowances

    Those receiving House Rent Allowance (HRA) or Leave Travel Allowance (LTA) can benefit from substantial tax savings under the old tax regime. HRA can reduce taxable income significantly, especially in metro areas, while LTA offers exemptions for travel expenses.

    6. Cost-Effective Asset Acquisition

    For individuals acquiring assets such as homes through loans, the old tax regime provides deductions on interest payments. Home loan borrowers can claim up to Rs 2 lakh deduction under Section 24(b) for interest payments.

    7. Various Other Deductions

    The old tax regime includes deductions under various sections, such as 80G for donations, 80TTA for interest on savings accounts, and specific exemptions for senior citizens.

    8. Building Wealth Through Tax Savings

    Maximizing tax savings can contribute significantly to wealth creation. Eligible taxpayers, with multiple deductions and exemptions, can benefit greatly from the old tax regime, resulting in substantial tax savings.

    Conclusion

    For individuals with considerable deductions under various sections of the Income Tax Act, sticking to the old tax regime often leads to higher tax savings. However, if your circumstances do not allow for significant deductions, the new tax regime might offer a simpler and more beneficial option. It's crucial to carefully evaluate your specific financial situation before making a decision.

    Considerations

    Take caution when considering changing tax regimes frequently, as there are restrictions on how often you can switch. While those without income from business or profession can choose between regimes each financial year, taxpayers with business or professional income have limited options.

    Understanding the benefits and drawbacks of both tax regimes is essential for making an informed decision that aligns with your financial goals and circumstances.

    To know more, get in touch by clicking on the below tab.
    Get Started Now
    ]]>    Tue, 09 Apr 2024 14:17:22 +0000