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Deposits query

30 January 2022

Company has recieved advance which is not adjusted within 365 days. So this is considered as deposit. How to return this advance amount???

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10 Replies

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 31 January 2022

From where it has received & for what it is received ?

Is it for share application money ?

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prasad Nilugal ( GST Practitioner & Accounts ) (14546 Points)
Replied 31 January 2022

Please elaborate in detail .

sabyasachi mukherjee (27117 Points)
Replied 31 January 2022

All advances are not deposit
It is as per Deposit rule as per Companies Act 2013.

Nidhi (Chief Accountant) (3150 Points)
Replied 31 January 2022

Source and purpose of receipt ?

Chirag (Professional) (1979 Points)
Replied 31 January 2022

First of All Advances are not exempted deposits ,it to be as per rule 2(1)(c) of AOD rules ,By the way amount to be appropriated towards good and services ,actual utilisation may go beyond 365 days... like warranty contract ( 5 Yrs ) where money recived should be appropriated towards such contract within 365 days...If you already mention in contract that such amount is for such purpose then as per view 365 days criteria will not bar it ...

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sabyasachi mukherjee (27117 Points)
Replied 31 January 2022

advance cannot be deposit.

lets go to the intricate details .

1. iTS GOVERNED BY SECTION 73 TO 76 OF COMPANIES ACT 1956.

DEPOSIT ARE SHOWN IN BALANCE SHEET SEPERATELY ON THE LIABILITIES.

Chirag (Professional) (1979 Points)
Replied 31 January 2022

As per law ,money to money transaction Is deposit and all monies which business ows always shown in liabilities side ,its not relevant for Companies act compliance...

sabyasachi mukherjee (27117 Points)
Replied 31 January 2022

Chirag

balance sheet is governed by companies act since the querist has asked for company transactions.

Chirag (Professional) (1979 Points)
Replied 31 January 2022

Queriest originally asked how to Return the amount ? and money can be returned back within 15 days of expiry of 365 days ,else deposit provisions will trigger...

The contention is wrong that advance can't be deposit ...while it's exempted deposit ,read rule 2(1)(c) of deposit rules