diff --git a/packages/crayons-extended/custom-objects/src/components/form-builder/components/field-editor.tsx b/packages/crayons-extended/custom-objects/src/components/form-builder/components/field-editor.tsx
index 63d848948..ff8945222 100644
--- a/packages/crayons-extended/custom-objects/src/components/form-builder/components/field-editor.tsx
+++ b/packages/crayons-extended/custom-objects/src/components/form-builder/components/field-editor.tsx
@@ -1053,7 +1053,15 @@ export class FieldEditor {
 
     let strInternalName = '';
     let boolInternalNameUpdated = false;
-    if ((!this.isInternalNameEdited && this.isNewField) || field.isNew) {
+    const objMaxLimitFieldInternalName = getMaxLimitProperty(
+      this.productName,
+      'maxInternalNameChars'
+    );
+    if (
+      ((!this.isInternalNameEdited && this.isNewField) || field.isNew) &&
+      objMaxLimitFieldInternalName &&
+      strInputValue.length <= objMaxLimitFieldInternalName.count
+    ) {
       strInternalName = deriveInternalNameFromLabel(strInputValue);
       boolInternalNameUpdated = true;
     }
@@ -1088,8 +1096,7 @@ export class FieldEditor {
         'maxInternalNameChars'
       );
       if (
-        !this.internalNameWarningMessage &&
-        this.internalNameWarningMessage !== '' &&
+        this.internalNameWarningMessage === '' &&
         objMaxLimitFieldName &&
         strInternalName.length >= objMaxLimitFieldName.count
       ) {
@@ -1099,6 +1106,8 @@ export class FieldEditor {
             count: objMaxLimitFieldName.count,
           }
         );
+      } else {
+        this.internalNameWarningMessage = '';
       }
 
       if (!this.isInternalNameEdited || field.isNew) {
diff --git a/packages/crayons-extended/custom-objects/src/components/form-builder/utils/form-builder-utils.spec.ts b/packages/crayons-extended/custom-objects/src/components/form-builder/utils/form-builder-utils.spec.ts
index 2c4bcfdfd..975a2c7ef 100644
--- a/packages/crayons-extended/custom-objects/src/components/form-builder/utils/form-builder-utils.spec.ts
+++ b/packages/crayons-extended/custom-objects/src/components/form-builder/utils/form-builder-utils.spec.ts
@@ -17,6 +17,7 @@ import {
   buildChoicesFromText,
   getParentId,
   getChildChoices,
+  getMaximumLimitsConfig,
 } from './form-builder-utils';
 
 describe('getFieldBasedOnLevel', () => {
@@ -586,3 +587,47 @@ describe('getChildChoices', () => {
     });
   });
 });
+describe('getMaximumLimitsConfig', () => {
+  it('returns maximum limits config for CUSTOM_OBJECTS', () => {
+    const formMapper = {
+      CUSTOM_OBJECTS: {
+        maximumLimits: {
+          DECIMAL: { count: 20, message: 'maximumLimits.fields' },
+        },
+      },
+    };
+    const result = getMaximumLimitsConfig();
+    expect(result.DECIMAL.count).toEqual(
+      formMapper.CUSTOM_OBJECTS.maximumLimits.DECIMAL.count
+    );
+  });
+
+  it('returns maximum limits config for Internal Name', () => {
+    const formMapper = {
+      CUSTOM_OBJECTS: {
+        maximumLimits: {
+          maxInternalNameChars: {
+            count: 50,
+            message: 'maximumLimits.maxCharsWarning',
+          },
+        },
+      },
+    };
+    const result = getMaximumLimitsConfig();
+    expect(result.maxInternalNameChars.count).toEqual(
+      formMapper.CUSTOM_OBJECTS.maximumLimits.maxInternalNameChars.count
+    );
+  });
+
+  it('returns null when productName is not found in formMapper', () => {
+    const formMapper = {
+      OTHER_PRODUCT: {
+        maximumLimits: {
+          DECIMAL: { count: 20, message: 'maximumLimits.fields' },
+        },
+      },
+    };
+    const result = getMaximumLimitsConfig('OTHER_PRODUCT');
+    expect(result).toBeNull();
+  });
+});