Published 16 June 2026
As of 2026, an enterprise in India is classified as Micro if its investment in plant and machinery or equipment is up to ₹2.5 crore and annual turnover is up to ₹10 crore; Small if investment is up to ₹25 crore and turnover up to ₹100 crore; and Medium if investment is up to ₹125 crore and turnover up to ₹500 crore. These limits took effect on 1 April 2025, under a Ministry of MSME notification (S.O. 1364(E), dated 21 March 2025) that raised investment thresholds by 2.5 times and turnover thresholds by 2 times compared to the 2020 framework, and they remain the current, applicable limits.
What are the current Udyam classification limits?
The classification uses two parameters together — investment and turnover — for each category:
- Micro Enterprise: Investment up to ₹2.5 crore AND turnover up to ₹10 crore
- Small Enterprise: Investment up to ₹25 crore AND turnover up to ₹100 crore
- Medium Enterprise: Investment up to ₹125 crore AND turnover up to ₹500 crore
These replaced the 2020 limits (₹1 cr/₹5 cr for Micro, ₹10 cr/₹50 cr for Small, ₹50 cr/₹250 cr for Medium) that had applied since Udyam Registration was introduced.
How is classification actually determined — investment or turnover?
Classification uses a composite criterion: both investment and turnover are checked, and the enterprise is placed in the higher of the two resulting categories. If your investment falls within the Micro limit but your turnover crosses into the Small range, you're classified as Small — not Micro. Businesses can't stay in a lower category just because one metric looks small; the less favorable figure governs.
How does Udyam Registration work?
Udyam Registration is a free, fully online, self-declaration-based process — no documents need to be uploaded. It's linked in real time to PAN, Aadhaar, and GST (where applicable) databases, which auto-populate investment and turnover data rather than relying on manual proof submission. A business owner typically needs only their Aadhaar and PAN to register, receiving a Udyam Registration Number and certificate, usually within a couple of days. GST-registered businesses must link their GSTIN as part of the process; GST-exempt small businesses are not blocked from registering.
Why does staying in a lower category matter for your business?
Categories unlock different levels of support. Micro and Small enterprises get stronger legal protection against payment delays under the MSMED Act, 2006 — buyers must pay within 45 days of accepting goods or services, or pay compound interest at three times the RBI-notified bank rate on the overdue amount. Smaller categories also generally get preferential access to priority sector lending, government tender set-asides and purchase preferences, and various subsidy schemes tied to MSME status. A business sitting near a threshold — say, turnover creeping past ₹10 crore — should track its numbers carefully, since crossing into the next category can mean losing certain protections even while gaining others (larger credit limits, bigger tender eligibility).
Is a turnover-only classification model coming?
Not yet. There has been some public discussion around simplifying MSME classification to a turnover-only model, but as of mid-2026 this has not been formally notified — the current composite (investment + turnover) criteria remain in force. Plan around the existing rules rather than anticipated changes until an official notification is issued.
Quick reference — current Udyam thresholds (effective 1 April 2025)
- Micro: ≤₹2.5 crore investment, ≤₹10 crore turnover
- Small: ≤₹25 crore investment, ≤₹100 crore turnover
- Medium: ≤₹125 crore investment, ≤₹500 crore turnover
Getting the classification right matters because it affects eligibility for loans, tenders, and legal protections — errors in self-declared figures can create compliance issues later. BookMyTM helps businesses determine their correct Udyam category, complete registration accurately, and pair it with related filings like trademark registration or GST compliance.
What is the current investment limit for a Micro enterprise in 2026?
₹2.5 crore in plant and machinery or equipment, along with turnover up to ₹10 crore — both effective since 1 April 2025.
Do I need to submit documents for Udyam Registration?
No. Udyam Registration is entirely self-declaration based and paperless; it uses your PAN, Aadhaar, and GST data to verify details automatically.
If my turnover is small but my investment is high, which category am I in?
You're classified under whichever parameter places you in the higher category — the more favorable figure doesn't apply on its own.
What happens if I exceed my current MSME category's limits?
You move to the next higher category, which can change your eligibility for certain lending schemes, tender set-asides, and delayed-payment protections.
Does Udyam Registration require a GST number?
Not necessarily — GST-exempt businesses can still register; GST-registered businesses must link their GSTIN as part of the process.
Are these limits final, or will they change again soon?
The April 2025 limits are the current official thresholds. A turnover-only model has been discussed but not notified as of mid-2026.