MSME Udyam Classification

Micro, small or medium under the limits from 1 April 2025, with exports excluded and the 43B(h) and MSME-1 impact.

The MSME Udyam Classification tool shows whether an enterprise is micro, small or medium under the limits in force from 1 April 2025 (notification S.O. 1364(E) dated 21 March 2025): micro up to Rs 2.5 crore investment and Rs 10 crore turnover, small up to Rs 25 crore and Rs 100 crore, and medium up to Rs 125 crore and Rs 500 crore. Both limits must be met, and export turnover is left out. It also shows whether buyers must follow Section 43B(h) and MSME Form I for payments to the enterprise.

Main activity

Investment in plant and machinery or equipment, written down value (₹ crore)

Total turnover (₹ crore)

Of which, export turnover (₹ crore)

Udyam Category

—

Turnover counted (exports excluded)—

Category by investment—

Category by turnover—

Enter the investment and turnover.

All GSTINs under one PAN are one enterprise: add up their investment and turnover. A new enterprise with no return yet uses the purchase value of its plant and machinery, excluding GST, on self-declaration.

Classification under the Micro, Small and Medium Enterprises Development Act, 2006 uses two tests together: investment in plant and machinery or equipment and turnover. An enterprise falls in a category only if it is within both limits; crossing either limit moves it to the next category. Figures are taken from the income-tax return and GST data linked to the PAN, for the previous financial year.

Limits from 1 April 2025

Category	Investment up to	Turnover up to	Earlier limits (2020)
Micro	₹2.5 crore	₹10 crore	₹1 crore / ₹5 crore
Small	₹25 crore	₹100 crore	₹10 crore / ₹50 crore
Medium	₹125 crore	₹500 crore	₹50 crore / ₹250 crore

Source: Ministry of MSME notification S.O. 1364(E) dated 21 March 2025, in force from 1 April 2025, which replaced the limits of S.O. 2119(E) dated 26 June 2020. The same limits apply to manufacturing and services.
Investment is the written down value of plant and machinery or equipment at the end of the previous year as per the income-tax return, excluding land and building and furniture and fittings.
Moving up and down: crossing either limit of the present category moves the enterprise up; it moves down only when it is below both limits of its present category. After an upward move, non-tax benefits of the earlier category continue for three years (S.O. 4926(E), 18 October 2022).
Buyers of micro and small enterprises: payments are due within the agreed period, up to 45 days (15 days without an agreement). A buyer that pays late loses the income-tax deduction for that year under Section 43B(h) (Section 37(2)(g) of the 2025 Act); use the MSME Payment 43B(h) Tracker. A company with dues to micro or small suppliers outstanding beyond 45 days files the half-yearly MSME Form I by 30 April and 31 October. Medium enterprises are outside both.

Important note: This tool provides an indicative output only. It does not factor in every special provision, surcharge, exception, or recent notification. Verify with the firm before acting on any computation.

Frequently Asked Questions

What are the MSME limits from 1 April 2025?

From 1 April 2025, notification S.O. 1364(E) dated 21 March 2025 classifies an enterprise as micro if its investment in plant and machinery or equipment is up to Rs 2.5 crore and its turnover is up to Rs 10 crore; small if up to Rs 25 crore and Rs 100 crore; and medium if up to Rs 125 crore and Rs 500 crore. The same limits apply to manufacturing and services enterprises.

Is export turnover counted for MSME classification?

No. Turnover from exports of goods, services or both is excluded when working out turnover for Udyam classification. An enterprise with large exports can therefore stay micro or small while its domestic turnover is within the limit.

What happens if an enterprise crosses only one of the two limits?

Classification is composite. If an enterprise crosses the limit of its present category on either investment or turnover, it moves to the next higher category. It moves to a lower category only when it is below both limits of its present category. After an upward change, it can continue to avail the non-tax benefits of its earlier category for three years.

Why does the micro or small classification matter to buyers?

Buyers must pay micro and small enterprises within the agreed period, which cannot exceed 45 days, or within 15 days where there is no agreement. Under Section 43B(h) of the Income-tax Act, 1961 (Section 37(2)(g) of the 2025 Act), a late payment is deductible only in the year it is actually paid. Companies also report such dues outstanding beyond 45 days in the half-yearly MSME Form I. These rules do not apply to medium enterprises.

How is investment in plant and machinery calculated?

Investment is the written down value of plant and machinery or equipment at the end of the previous financial year, as reported in the income-tax return, excluding land and building and furniture and fittings. For a new enterprise that has not filed a return, the purchase value excluding GST is used on self-declaration. Investment and turnover of all GSTINs under the same PAN are added together.

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Published by SKAG and Associates, Chartered Accountants, New Delhi · Proprietor CA Gaurav Singh (ICAI M.No. 539050). General information only, not professional advice.

MSME Udyam Classification

Use the MSME Udyam Classification

Udyam Category

Limits from 1 April 2025

Frequently Asked Questions

Due in the next 30 days

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