Udyam Registration

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Udyam Registration: Empowering Indian Businesses

Udyam registration, formerly known as MSME registration, is a certification provided to micro, small, and medium-sized businesses in India under the MSME Act, 2006. This registration holds significant importance, especially for small and medium-sized enterprises (SMEs) across the country. The growth of a nation’s economy is closely tied to the success and development of its SMEs.

Udyam registration opens doors to a multitude of benefits under the current MSME scheme of the Indian Government. Among these advantages is the opportunity for businesses to actively participate in both state and central government business initiatives.

Key Benefits of Udyam Registration:

  1. Payment Protection: Business owners gain protection against payment delays.
  2. Collateral-Free Loans: Access to collateral-free loans from banks.
  3. Octroi Benefits: Eligibility for octroi benefits.
  4. Lower Interest Rates: Potential reduction in interest rates from banks.
  5. Electricity Bill Concessions: Entrepreneurs opting for Udyog Aadhar can enjoy electricity bill concessions.
  6. Overdraft Interest Exemption: Exemption from 1 percent interest rate on overdraft.
  7. Subsidies: Eligibility for subsidies from NSIC and credit ratings, as well as IPS subsidies.
  8. ISO Certificate Reimbursement: Reimbursement for expenses incurred in obtaining the ISO certificate.
  9. Reservation Advantages: Access to product reservation for exclusive manufacturing by MSMEs and SSI units.
  10. Excise Exemption: Eligibility for the Excise Exemption Scheme.
  11. Government Tender Exemption: Exemption when applying for government tenders.
  12. Direct Tax Exemption: Possibility of exemption under direct tax laws.
  13. Bank Mortgages Made Easy: Simplified bank mortgage processes.
  14. International Business Opportunities: Participation in international business fairs.


Enterprises are categorized as follows:

  • Micro Enterprise: Investment in plant and machinery or equipment does not exceed one crore rupees, and turnover does not exceed five crore rupees.
  • Small Enterprise: Investment in plant and machinery or equipment does not exceed ten crore rupees, and turnover does not exceed fifty crore rupees.
  • Medium Enterprise: Investment in plant and machinery or equipment does not exceed fifty crore rupees, and turnover does not exceed two hundred and fifty crore rupees.

Calculation of Investment in Plant and Machinery:

  • Investment calculation is linked to the Income Tax Return filed under the Income Tax Act, 1961.
  • For new enterprises without ITR filing, investment is based on the promoter’s self-declaration, valid until the first ITR filing before March 31 of the financial year.
  • The term “plant and machinery or equipment” follows the definitions in the Income Tax Rules, 1962 and excludes land and buildings, furniture, and fittings.
  • Invoice value of plant and machinery, whether new or second hand, should be considered, excluding GST for newly formed enterprises without ITR.
  • Certain items specified in explanation I to section 7 of the Act should be excluded from the investment calculation.

Calculation of Turnover:

  • Exports are excluded when calculating enterprise turnover.
  • Turnover and export turnover information should align with the Income Tax Act or the CGST and GSTIN.
  • Turnover for enterprises without a PAN is based on self-declaration until March 31, 2021, after which a PAN and GSTIN are mandatory.

Composite Criteria for Classification:

Composite criteria of investment and turnover determine enterprise classification. If an enterprise exceeds the ceiling limits in either criterion, it moves to the next higher category. An enterprise can move to a lower category only if it falls below the ceiling limits in both investment and turnover criteria.

Details Required for Udyam Registration:

To register for Udyam, provide the following details:

  • Aadhaar number of the applicant/owner
  • Mobile number of the applicant/owner
  • Name of the owner/applicant as per Aadhaar
  • Social category of the owner/applicant: General/OBC/SC/ST
  • Name of the enterprise
  • Address of the enterprise
  • Type of enterprise (prop/co/huf/partnership)
  • PAN of the enterprise
  • Location of plant/enterprise with complete address
  • Date of commencement of business activity
  • Bank account details with IFSC code and complete bank address
  • Major activity of the enterprise (min 3 activities)
  • Number of persons employed
  • Investment in plant & machinery/equipment
  • Activity of enterprise (manufacturing/service)
  • NIC Code
  • No. of persons employed in the Company
  • ITR details
  • GSTIN status
  • District Industry Centre
  • Specify the area (Urban or Rural)