Udyam Registration — Free MSME Registration on Aadhaar and PAN, the Revised Micro/Small/Medium Limits From 1 April 2025 (Investment ₹2.5/25/125 Crore, Turnover ₹10/100/500 Crore), What Counts as Investment and Turnover, Benefits (45-Day Payment Protection Under Section 43B(h) and MSME Samadhaan, Collateral-Free Loans, Priority Lending, Tender and EMD Relief, Subsidy Eligibility, Udyam Assist for Informal Units), Updating and Re-Classification, and Common Mistakes
₹2.5 Cr / ₹10 Cr
Micro: investment in plant & machinery/equipment / turnover, from 1 April 2025 (small ₹25 Cr / ₹100 Cr; medium ₹125 Cr / ₹500 Cr)
Free
Udyam registration is free on the government portal — Aadhaar, PAN and self-declaration; no documents to upload
45 days
Maximum credit period a buyer may take from a micro or small supplier; beyond it, interest at 3× the bank rate and no tax deduction until paid
25%
Share of central government/PSU procurement reserved for MSEs, with EMD and tender-fee exemption
Guide by BookMyCA's Chartered Accountants · pan-India serviceLast verified against official guidelines on 7 September 2026.
Video Explanation & Insights
Benefits of MSME status — check your eligibility and what you get
4 videos on this topic
Who is an MSME — the 2025 limits and how they are measured
| Category | Investment in plant & machinery or equipment | Annual turnover |
|---|---|---|
| Micro | Up to ₹2.5 crore | Up to ₹10 crore |
| Small | Up to ₹25 crore | Up to ₹100 crore |
| Medium | Up to ₹125 crore | Up to ₹500 crore |
- •Both limits apply together: a unit is classified in the higher category if it crosses either the investment or the turnover limit of the lower one.
- •Investment: written-down value of plant and machinery/equipment as per the ITR of the previous year (purchase value, excluding GST, for a new unit on self-declaration); land, building, furniture and a few notified items are excluded.
- •Turnover: as per GST/ITR data linked to the PAN; exports are excluded from turnover for classification.
- •Traders (wholesale and retail) have been eligible for Udyam since July 2021 — for priority-sector lending and payment protection; they remain outside most manufacturing subsidies.
- •One Udyam per PAN covering all units and activities (manufacturing and service can be combined); professionals (CAs, doctors) register as service enterprises.
- •Composite rule for upgrading and downgrading: an enterprise that crosses a limit moves up from the next financial year; it moves down only after staying below the limit for the relevant period.
Registering, updating and Udyam Assist
- 1udyamregistration.gov.in → 'For new entrepreneurs who are not registered yet' → Aadhaar of the proprietor/managing partner/authorised signatory → OTP → PAN validation (for companies/LLPs the entity PAN; the ITR and GST data are pulled).
- 2Fill: enterprise name, type of organisation, address, bank details, major activity (manufacturing/services — choose correctly; a unit that both manufactures and trades selects manufacturing as major), NIC codes for each activity, number of employees, investment and turnover (auto-filled from ITR/GST where available), date of commencement.
- 3Submit → the Udyam Registration Number (URN) and an e-certificate with a QR code are issued instantly; no fee, no document upload — anyone charging for 'MSME certificate' is a private agent.
- 4Update: log in with URN and OTP to update address, bank, activities or figures; investment and turnover are refreshed from ITR/GST each year — file returns on time so the classification is current.
- 5Udyam Assist Platform (udyamassist.gov.in): informal micro units without GST/PAN-linked income proof get an Udyam Assist Certificate through banks/NBFCs for priority-sector lending.
- 6Legacy: old Udyog Aadhaar (UAM) and EM-II registrations expired on 30 June 2022 — units still quoting UAM numbers must migrate to Udyam.
What Udyam actually gets you
| Benefit | Detail |
|---|---|
| Payment within 45 days | Sections 15–16 of the MSMED Act: a buyer must pay a micro or small supplier within the agreed period (max 45 days) or pay compound interest at three times the RBI bank rate; section 43B(h) of the Income-tax Act denies the buyer a deduction until payment — the 'Udyam invoice' has become a collection tool |
| MSME Samadhaan | File delayed-payment claims online; the MSE Facilitation Council arbitrates; awards are enforceable |
| TReDS | Discount invoices on RXIL, M1xchange, Invoicemart; large buyers with turnover above ₹250 crore must onboard |
| Credit | Collateral-free loans under CGTMSE (up to ₹10 crore); priority-sector classification; Mudra and PMEGP eligibility; lower guarantee fees for women/SC/ST |
| Procurement | 25% of central government/CPSE purchases reserved for MSEs (4% SC/ST, 3% women); exemption from EMD and tender fees; GeM registration as MSE seller; price preference in some tenders |
| Subsidies | Gate for PMEGP, SCLCSS, MSME Innovative (IPR), ZED and ISO reimbursement, MSE-CDP, state MSME policies (RIPS, ODOP), export MDA |
| Other | Concession in electricity tariffs in some states, protection against delayed payment in government contracts, reimbursement of bar-code registration fees, and the 'MSME' identity buyers ask for in vendor onboarding |
Udyam does not by itself give a subsidy, a loan or a tax exemption — it makes the enterprise eligible to apply for them. It also creates obligations: MSME-1 half-yearly return by companies that owe MSEs beyond 45 days, and a buyer's disclosure of MSE dues in the financial statements.
Common mistakes we correct
- •'Trading' selected as major activity by a unit that manufactures — excludes it from manufacturing subsidies and some tenders; update the activity and NIC code.
- •Wrong or missing NIC codes — schemes (food processing, textiles, IT) check the code; add every activity.
- •Two Udyam numbers on one PAN (a second one created for a new unit) — one URN per PAN; add units instead.
- •Investment declared including land, building and GST, pushing a micro unit into 'small' — restate as per the rule.
- •Not updating after a change of address, bank or constitution — the certificate must match the bank and subsidy files.
- •Late ITR/GST filings leaving the classification stale — the portal refreshes figures from returns.
Udyam registration: questions we are asked
Not for running a business — but it is the condition for MSME benefits, most subsidies, CGTMSE, tender exemptions and the 45-day payment protection.
No — it is free on the government portal; there is no renewal fee either.
Yes — as a service enterprise with the relevant NIC code; Udyam then supports current-account opening, loans and the 45-day rule against clients.
Not if you are not required to have GST; PAN is required (the exemption for proprietors without PAN ended).
No — you become small from the next financial year; benefits tied to 'micro' (some scheme rates) change accordingly.
Yes — registration, corrections of activity/NIC/figures, migration from UAM, MSME-1 returns for buyers, and Samadhaan claims for delayed payments.
Official sources this page is based on
- Udyam Registration portal — Ministry of MSME
- MSME classification notification and MSMED Act, 2006 — Ministry of MSME
- Udyam Assist Platform — informal micro enterprises
Fees, thresholds and timelines above are taken from these Acts, Rules, notifications and official portals; where the authority's current notification differs, the notification prevails.