How to Do MSME Form 1 Compliance Filing with Tally Prime 6.1

Published on: 07-08-2025

How to Do MSME Form 1 Compliance Filing with Tally Prime 6.1

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the Indian economy. To ensure timely payments to MSMEs, the Ministry of Corporate Affairs (MCA) introduced MSME Form 1, making it mandatory for companies to report all outstanding dues to MSME vendors that exceed 45 days. Tally Prime 6.1, one of India’s most popular accounting software solutions, makes it easier for businesses to identify these vendors and prepare the required data.

In this guide, we'll walk you through the step-by-step process of preparing and filing MSME Form 1 using Tally Prime 6.1. This includes enabling MSME settings in Tally, identifying overdue payables, exporting relevant reports, and finally preparing your form for MCA submission.

What is MSME Form 1?

MSME Form 1 is a compliance requirement under Section 405 of the Companies Act, 2013, and the related notification issued by the Ministry of Corporate Affairs. It mandates companies (not MSMEs themselves) to submit details of all payments due to MSME vendors that have remained unpaid for more than 45 days.

Who Needs to File?

All companies (excluding MSMEs) that have outstanding payments to MSME suppliers exceeding 45 days from the date of acceptance or deemed acceptance of goods/services are required to file MSME Form 1.

Due Dates for Filing:

• Initial Return: For all outstanding dues as of the date of the notification.
• Half-Yearly Return:
  • April to September: Due by 31st October
  • October to March: Due by 30th April

How Tally Prime 6.1 Helps with MSME Form 1 Filing

Tally Prime 6.1 offers functionality to record and classify vendors as MSMEs, track payable aging, and generate outstanding reports that highlight dues beyond 45 days. Here's how you can use Tally effectively to gather all the data required for MSME compliance.

Step-by-Step Guide to MSME Form 1 Filing Using Tally Prime 6.1

Step 1: Update to Tally Prime 6.1

Ensure you are using Tally Prime 6.1 or above, as this version provides better compliance reporting and flexibility in managing MSME vendor details.

• Download and install the latest release
• Backup your data before updating

Step 2: Enable MSME Classification in Tally

To track MSME vendors, you must classify them properly in the ledger creation screen.

To enable:

1. Go to Gateway of Tally → F11: Features → Accounting Features
2. Set “Enable MSME classification” to Yes
3. Save settings

Step 3: Mark Vendors as MSMEs

Once MSME classification is enabled:

1. Go to Gateway of Tally → Alter → Ledger
2. Select the vendor ledger
3. Under “Is the party a registered MSME?”, select Yes
4. Choose the type: Micro, Small, or Medium
5. Save the ledger

Repeat this step for all vendors registered as MSMEs.

Step 4: Record Purchase Entries

While recording purchases from MSME vendors:

• Use the appropriate vendor ledger
• Enter Invoice Date and Due Date properly
• Make sure to maintain accurate bill-wise tracking

This ensures Tally can calculate the exact number of days a bill has remained unpaid.

Step 5: Generate Outstanding Payables Report

You need to identify outstanding payments to MSME vendors that exceed 45 days.

To view this:

1. Go to Gateway of Tally → Display More Reports → Outstanding Reports → Ledger-wise Outstanding
2. Filter the report for MSME vendors
3. Use the Aging Analysis feature to view dues over 45 days

You can also use Group Summary under Sundry Creditors and then drill down to MSME vendors.

Step 6: Export the Data

Once you've identified overdue payments:

1. Use F6 (Age-wise analysis) on the report
2. Press Alt+E to export
3. Choose Excel as the format
4. Save the report for processing and form preparation

This file can now be used to fill in details for MSME Form 1.

Step 7: Prepare MSME Form 1

Go to the MCA portal and download MSME Form 1 in the required format. Fill in the following details based on your Tally export:

• Name of MSME supplier
• PAN
• Amount Due
• Date from which it became due
• Reasons for delay

Step 8: Submit on MCA Portal

1. Log in to the MCA Portal
2. Upload the duly filled MSME Form 1
3. Attach Digital Signature Certificate (DSC) of a director
4. Submit and download acknowledgment

Best Practices for MSME Compliance

• Timely Vendor Classification: Always mark MSME vendors as soon as they are onboarded.
• Accurate Bill-wise Tracking: Ensure invoice and due dates are properly maintained in Tally.
• Periodic Review: Run aging analysis every month to stay on top of due payments.
• Avoid Penalties: Delayed or non-filing can result in penalties under the Companies Act, 2013.

Conclusion

Tally Prime 6.1 makes it easier for companies to stay compliant with MSME Form 1 filing requirements by offering tools to classify MSME vendors, track outstanding payables, and generate reports. By integrating compliance within your accounting workflow, you not only avoid penalties but also contribute to the financial well-being of India's MSME sector.

Make it a habit to update your MSME vendor list, monitor overdue bills, and maintain accurate data in Tally — it will save you time and trouble during the half-yearly compliance window.