Deposites under ca, 2013

Hi Ekta,

As My understanding of rules 3 & 4, let me make u understand,

1) Clause 3 talk about all deposits may  for short term requirements or deposits upto 36 months, total ceiling limit is 25 % of Aggregate of Paid Capital and Free reserves

2) While Clause 4, deals in 2 phases

A)  in first phase gives ceiling limit of 10% for deposits which are for time not less than six months and not greater than 36 months

B) In second phase is same as Clause 3, total ceiling limit is 25% consisting all kind of Deposits from members

i hope i could make you clear,

regards

BHAVIN N SHETH

Thank you sir for spending time for my query. but still i am not clear about the clauses. I have some other doubts also. They are as follow.

1. is it required for any company to pay interest to any unsecured loan lender who are not Directors of the Company and due to that their unsecured loan is to be treated as deposits?

2.when the unsecured loan from the person other than Directors converted into deposits (on renewal of existing unsecured loan), is it required to issue circular as per point 4 of deposits rules, 2014, enter into insurance contract as per point 5 and create charge and also appoint trustee as per point 6 and 7 respectively?? Thank you sir in advance.

Dear EKTA,

As far as my limited knowledge is concerned,

Answer to Question 1:-  yes , interest need to be paid as why a person given loan without interest as it would be considered as deemed dividend from Income tax point of view for company if no interest is charge.

Answer to Question 2:- yes if it is deposits, steps as quoted by you need to be followed

Also,please see the Definitions of Deposits which include that following are not considered as deposits so if deposits in your case if falling below mentioned category, need not to go for all the steps as said by you
(xiii) any amount brought in by the promoters of the company by way of unsecured loan in pursuance of the
stipulation of any lending financial institution or a bank subject to fulfillment of the following conditions, namely:-
(a) the loan is brought in pursuance of the stipulation imposed by the lending institutions on the
promoters to contribute such finance;
(b) the loan is provided by the promoters themselves or by their relatives or by both; and
(c) the exemption under this sub-clause shall be available only till the loans of financial institution or
bank are repaid and not thereafter;
i hope i am successful in resolving your query, please feel free in case of any query

regards

BHAVIN SHETH