MSME Classification
Micro, small and medium limits from 1 April 2025, and how they are measured.
Key facts
- From 1 April 2025 (Notification S.O. 1364(E), 21 March 2025): 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.
- Earlier limits were ₹1/10/50 crore for investment and ₹5/50/250 crore for turnover.
- Both investment and turnover must be within the limit. Crossing either one moves the enterprise up a category; moving down needs both to fall below the lower limits.
- Investment in plant, machinery or equipment is taken at written-down value from the income tax return, excluding pollution control, R&D and safety equipment.
- Turnover excludes exports of goods and services. It is taken from GST and income tax data linked to the PAN.
- All units under one PAN are counted together for classification.
- Retail and wholesale traders can register on Udyam, but only for priority sector lending benefits.
Common questions
What are the new MSME limits?
From 1 April 2025: 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. Both conditions must be met.
Is export turnover counted for MSME classification?
No. Exports of goods and services are excluded from turnover for MSME classification.
How is investment in plant and machinery calculated?
At written-down value as per the income tax return of the previous year, excluding land, building, furniture, pollution control, R&D and industrial safety equipment. New units use a self-declaration until their first ITR.
Can a trader get MSME registration?
Yes. Retail and wholesale traders can register on Udyam, but the benefit is limited to priority sector lending. Other MSME benefits like the 45-day payment protection apply to manufacturers and service providers.
What happens if my turnover crosses the micro limit?
The enterprise is reclassified as small from the next year based on ITR/GST data. Benefits linked to micro status (like certain subsidies) then stop, but small enterprises still get the 45-day payment protection.
Sources
- Udyam registration and MSME classification by investment and turnover (as amended)