Decide whether the following transactions will fall within the ambit of "deposits" as defined under the Companies Act, 2013, quoting relevant provisions of the Act : (b) Great Ltd. collected a security deposit of ₹5 lakh
CS Professional · Advanced Company Law and Practice · PYQS · June 2017
Decide whether the following transactions will fall within the ambit of "deposits" as defined under the Companies Act, 2013, quoting relevant provisions of the Act : (b) Great Ltd. collected a security deposit of ₹5 lakh from Mr. Parteek, an employee whose monthly salary was ₹25,000 per month.
Answer & Explanation:
Deposit does not include any amount received from an employee of the company not exceeding his annual salary under a contract of employment with the company in the nature of non-interest bearing security deposit. [Rule 2 (c)(x)] The security deposit of ₹5,00,000 collected from Mr. Prateek Rustagi as an employee, exceeds his annual salary of ₹3,00,000 and hence will be treated as deposit.
Topics: Acceptance of Deposits by Companies
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