Treatment of security deposit taken for training purpose

First of all it is illigal to accept any amount from emloyees as security deposit....

Secondly how you can absorb this amount which you said "accepted as security deposit" you will be endup in legal battle with labour department. 

Dear Mr.Dattari,  Thanks for your reply sir.  Actually the trainees are paid a monthly stipend which is basically the refund of deposit amount they paid to the company.  Can you please advise them to what account the deposit amount is to be taken and paid monthly from it, of course, not involving any tax implecations. Only the last instalment of the Deposit (13th month) is absorbed in the accounts as cost of training materials and certification charges.

Regards,