Thousands of businesses changed MSME category without doing anything. On 1 April 2025 the government raised the investment and turnover limits that decide whether you are micro, small or medium. If your Udyam certificate is old, your category, and the protections that come with it, may now be different.
Key takeaway: Micro = investment up to ₹2.5 crore and turnover up to ₹10 crore. Small = up to ₹25 crore and ₹100 crore. Medium = up to ₹125 crore and ₹500 crore. Udyam registration is free on udyamregistration.gov.in — never pay an agent site.
Proof matrix
| Item | Detail |
|---|---|
| Law | MSMED Act, 2006, Section 7 (classification) |
| Current limits | Gazette notification dated 21 March 2025, effective 1 April 2025 |
| Test | Composite — both investment and turnover must fit the category |
| Turnover | Excludes export turnover; picked from GST/ITR data linked to PAN |
| Investment | Plant & machinery or equipment (written-down value per ITR); land and building excluded |
| Registration | Udyam, Aadhaar-based, PAN and GSTIN linked, no fee |
Old vs new MSME limits
| Category | Investment (old → new) | Turnover (old → new) |
|---|---|---|
| Micro | ₹1 crore → ₹2.5 crore | ₹5 crore → ₹10 crore |
| Small | ₹10 crore → ₹25 crore | ₹50 crore → ₹100 crore |
| Medium | ₹50 crore → ₹125 crore | ₹250 crore → ₹500 crore |
Who moved category? Two examples
- A small manufacturer becomes micro. Machinery ₹2 crore, turnover ₹8 crore. Under the old limits turnover above ₹5 crore made it "small". Now it is micro.
- A distributor becomes small. Turnover ₹60 crore was "medium" (above ₹50 crore). Now it is small. But traders get Udyam mainly for priority-sector lending, so check which benefits apply.
If you exceed either limit, you move to the higher category. A business that grows into a higher category keeps its non-tax benefits for three years after the change.
What Udyam registration gets you
| Benefit | What it means in practice |
|---|---|
| Faster payments from buyers | Buyers must pay micro and small suppliers within 15/45 days or lose their tax deduction (Sec 37(2)(g), Income-tax Act 2025) and owe 3× Bank Rate interest |
| Collateral-free loans | Credit guarantee cover through CGTMSE for eligible MSE loans |
| Priority sector lending | Banks count MSME loans towards targets, which helps approvals |
| Government tenders | Central ministries and PSUs must buy at least 25% of annual procurement from micro and small enterprises; EMD exemption |
| Complaint route | File delayed-payment cases on MSME Samadhaan |
How to register on Udyam: step by step
- Go to udyamregistration.gov.in (the only official site) and choose new registration.
- Enter the owner's or authorised signatory's Aadhaar and verify the OTP.
- Enter PAN; the portal pulls ITR and GST data automatically. GSTIN is required where GST registration applies.
- Fill business name, address, bank details, NIC activity code and number of employees.
- Submit. The certificate with your Udyam number is issued online. No documents and no fee.
- Informal micro units without PAN or GST can use the Udyam Assist Platform through a bank or SIDBI-designated agency.
Before you rely on your certificate: pitfalls
- Using a lookalike "Udyam" website that charges ₹1,000–₹5,000. The government portal is free.
- Choosing "trading" when you actually manufacture or provide services — it limits your benefits.
- Not updating the certificate after GST or ITR changes. Category is reclassified using that data.
- Not sharing your Udyam number with buyers. They cannot apply the 45-day rule without it.
Check your turnover in DAM before you register
Steps use DAM's in-app search.
- Open Search and type Profit & Loss; set the financial year to see total sales.
- Search Sales Invoices to browse the full sales register for the year.
- Search GST Settings to confirm the GSTIN your Udyam data will be linked to.
Know your turnover before Udyam asks
Every sale and purchase in one app, so your MSME category is never a guess.
Frequently Asked Questions
What is the turnover limit for a micro enterprise in 2026?
Up to ₹10 crore, with investment in plant and machinery or equipment up to ₹2.5 crore.
Is Udyam registration free?
Yes. It is free on udyamregistration.gov.in and needs no documents beyond Aadhaar, PAN and GSTIN where applicable.
Are exports counted in turnover?
No. Export turnover is excluded for MSME classification.
Can a retailer register on Udyam?
Yes, but retail and wholesale traders are registered for priority-sector lending benefits, not the full set of MSE benefits.
Sources
Content checked on 23 October 2026. Udyam Registration (official portal) · SIDBI: MSME classification · Tally: MSME turnover and investment limits · MSME Samadhaan.
Disclaimer: This guide is for educational purposes only and does not constitute formal tax, legal or financial advice. Verify with a registered Chartered Accountant (CA) before acting.