Effortless MSME Form 1 Compliance in TallyPrime: A Step-by-Step Guide

Published on: 19-08-2025

Effortless MSME Form 1 Compliance in TallyPrime: A Step-by-Step Guide

With the Ministry of Corporate Affairs (MCA) revising MSME Form 1 requirements in line with the latest v3 portal guidelines, businesses need to ensure timely and accurate compliance. TallyPrime, India’s most trusted business management software, has now incorporated a revised MSME Form 1 feature that allows companies to seamlessly meet these obligations without manual effort or data duplication.

In this article, we will walk you through how TallyPrime helps you manage MSME Form 1 compliance, why it matters, and how your business can implement it smoothly.

Why MSME Form 1 Compliance Matters

MSME Form 1 is a half-yearly return that companies must file if they have:

1. Outstanding payments to MSME suppliers beyond 45 days from the date of acceptance of goods or services.
2. Details of such outstanding dues, including supplier name, amount, and reasons for delay.

Non-filing or incorrect filing can result in penalties under the Companies Act, reputational risks, and potential scrutiny by authorities.

With the revised MCA guidelines and the v3 portal, compliance has become more structured but also more detailed, making automation through software like TallyPrime essential.

How TallyPrime Helps You File MSME Form 1

TallyPrime’s Revised MSME Form 1 feature is designed to map your purchase, payables, and vendor data directly with the compliance format prescribed by MCA. Here’s a step-by-step overview:

1. Enable MSME Compliance in TallyPrime

• Open TallyPrime → F11: Features → Statutory & Taxation.
• Enable MSME Reporting.
• Update your company master with details required for MCA compliance.

This step ensures your system is ready to track MSME-related transactions.

2. Tag MSME Vendors in Your Ledger Master

• While creating or editing a supplier ledger, you can now mark whether the supplier is an MSME registered entity.
• Input details such as:
  • MSME registration number (Udyam/UAM).
  • MSME category (Micro / Small).
  • Date of registration.

This tagging ensures TallyPrime automatically recognizes outstanding payments to MSME vendors.

3. Track Outstanding Payments Beyond 45 Days

TallyPrime automatically:

• Identifies invoices payable to MSME suppliers.
• Tracks whether payments are overdue beyond 45 days.
• Generates a report of outstanding dues that need to be disclosed in MSME Form 1.

This eliminates manual calculations and reduces compliance errors.

4. Generate MSME Form 1 Data in Prescribed Format

• From the Statutory Reports section in TallyPrime, select MSME Form 1 Report.
• The system displays all pending dues to MSME suppliers, categorized as required by MCA.
• You can export the data in the Excel/CSV format directly compatible with the MCA v3 portal.

This ensures quick and accurate filing without re-entering data manually.

5. Provide Reasons for Payment Delays

The revised MCA guidelines require companies to mention reasons for outstanding dues.

• TallyPrime allows you to add comments/remarks against each supplier transaction.
• These reasons are automatically included in the generated MSME Form 1 statement.

This feature ensures your filings are complete and transparent.

6. File Seamlessly on MCA v3 Portal

• Once the data is generated in TallyPrime, simply upload it on the MCA v3 portal.
• Verify the details, digitally sign, and submit.
• Keep the acknowledgment for company records.

Since TallyPrime’s export matches the v3 schema, there is no mismatch during submission.

Key Benefits of Using TallyPrime for MSME Form 1

1. 100% Compliance Ready – Matches the latest MCA guidelines and v3 portal requirements.
2. No Manual Work – Data flows directly from your ledgers and payables.
3. Error-Free Filing – Automated checks ensure accuracy.
4. Audit Trail Ready – Complete records of vendors, payments, and reasons for delay are maintained.
5. Time-Saving – What would take hours manually now takes just a few minutes.

Best Practices for Smooth MSME Form 1 Filing in TallyPrime

• Update Vendor Details Regularly – Ensure every MSME supplier ledger has Udyam details.
• Reconcile Payables Monthly – Review outstanding dues before filing to avoid disputes.
• Use TallyPrime Reports – Rely on automated overdue tracking instead of spreadsheets.
• Keep Remarks Ready – Document reasons for any delay in payment beyond 45 days.

By following these practices, your business will always remain compliant and audit-ready.

Conclusion

The revised MSME Form 1 requirement by MCA is a crucial compliance responsibility for companies dealing with MSME suppliers. TallyPrime has made this process simpler, faster, and fully automated by integrating it into its compliance features.

Instead of struggling with spreadsheets and manual reconciliations, companies can now:

• Tag suppliers correctly.
• Track dues automatically.
• Generate the report in MCA-ready format.
• File seamlessly with zero hassle.

With TallyPrime, your company can focus on building stronger supplier relationships and business growth while staying fully compliant with MSME regulations.

✅ In short: TallyPrime’s revised MSME Form 1 feature is your one-stop solution for effortless compliance with MCA’s v3 portal requirements.