Strategic Finance for MSMEs: Insights from the IamSMEofIndia Seminar

Indeed, staying updated with the latest fiscal policies is the cornerstone of a successful manufacturing business. On March 24, 2022, during a high-impact seminar organized by IamSMEofIndia, I had the privilege of sharing strategic ideas on Taxation and Finance tailored specifically for the Indian MSME sector.

1. Unlocking the Power of Section 80JJAA -Taxation and Finance Strategies for MSME

Initially, many manufacturers overlook the significant savings available through Section 80JJAA of the Income Tax Act. Specifically, this section provides a deduction of 30% of additional employee cost for three years.

Key takeaway: If you are a manufacturing MSME hiring new staff, this incentive can substantially reduce your tax liability. Admittedly, proper documentation of the “additional employee” status is critical to claim this benefit successfully.

2. Tax Advantages of a New Pvt Ltd Company – Taxation and Finance Strategies for MSME

Furthermore, for those looking to expand or start a “Make in India” initiative, the tax landscape has never been more favorable. Notably, new manufacturing companies incorporated on or after October 1, 2019, can opt for a significantly lower base tax rate (15% plus surcharge and cess).

By choosing the right corporate structure, MSMEs can:

Lower Tax Outgo: Retain more profits for reinvestment into machinery and technology.
Global Competitiveness: Align with global tax standards to attract international partners.
Financial Discipline: Transition toward a system-driven management model.

3. Empowering MSME-DI and the “Make in India” Mission

Ultimately, the goal of our session was to align local manufacturing strengths with national objectives. In partnership with MSME-DI (Micro, Small & Medium Enterprises Development Institute), we discussed how financial discipline and strategic tax planning act as the digital engine for growth.

Proudly, as a member of IamSMEofIndia, we continue to provide a platform where small and medium enterprises can learn, network, and grow 10x by adopting top-notch financial technologies.

Conclusion: Start Implementing Today

To conclude, the ideas shared in these 45 minutes are designed to be actionable. Whether you are a seasoned manufacturer or a new startup, the path to profitability is paved with better financial governance. Indeed, as the landscape of Indian manufacturing evolves, staying compliant and informed is no longer a choice—it is a competitive advantage.