Treatment of security deposit taken for training purpose

A company has received amounts as Training advance from some employees. The amount was credited to Security Deposit account. At the end of the year, when the training was completed, a balance of Rs 20,000 remained from the Deposit amount after paying the trainee a stipend of Rs 20,000 every month. The company is absorbing this amount as Training materials, certification expense etc. To which account this income has to be taken?

Some of the employees have LOP during the year and hence they were not paid full Rs 20,000 each month. How could this LOP be adjusted from the Deposit amount.

Thanks for your urgent reply to tameez09 @ gmail.com

Regards,

Replies (2)

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,

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