According to Section 73, a company shall, before 30th April of each year, transfer a sum which shall not be less than 20% of the amount of it's deposits maturing during the following financial year, in a separate bank account to be called deposit repayment reserve account.
Eg - In the FY 2019-20, the maturing deposits are of Rs. 70 lakh and in the FY 2020-21, the maturing deposits are of Rs. 30 lakh.
My question is : What amount would be transferred during both the years?
Talking about FY 2019-20, would it be 20% of (70+30) lakh or 20% of 70 lakh.
Answer please.
The Co. is required to deposit, on or before 30th of April each year, at least 20% of the amount of its deposits maturing during the following financial year.
So if in the FY 2020-21 the deposits maturing amount is 100 cr then the amount will be 20 Lakh. And if the deposits maturing amount is 30 lakh then the amount will be 6 lakh.
As clearly written in the section that the deposits maturing during the following FY that amount need to transfer the account called deposit repayment reserve account.
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