Forfeiture of deposit

Hi

 

Company B collect the deposits from employee at the begining of the joining of company once they recruited the employee.

Basically deposit is taken for retention of the employee for certain specific period if employee leave the Company before this specific period then deposit is forfieted by the company and credited to the employee cost.

Whether treatment given by the Company is correct or it should be classifed as other income.

Kindly advice.

 

 

 

Replies (2)

correct...

So your veiw is to show under other income.

If Comapny show under other income then there would be income tax implication since there is huge business loss and Income tax authority may ask company to pay tax on other income.

 

kindly advice

 

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