Whether advance taken from customers by real estate company on which no interest has been paid will be treated as advance or deposit as per the Companies Act, 2013?

    Posted By : Ekta / Published on : 11-Oct-2018 11:25 PM / View : 82 / Comment : 2
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    Dear Members, kindly guide on this query.
    Read more on : advance paid been treated companies interest deposit which customers

    • Dear Ekta,

      Please find below an answer to your query

      As per the Rule 2(xii) of the Companies (Acceptance of Deposits) Rules, 2014, any amount received in the course of, or for the purposes of the business of the company – as advance, accounted for in any manner whatsoever, received in connection with consideration for property under an agreement or arrangement is exempted from the definition of the Deposits but if such advance is not adjusted against the property in accordance with the terms of agreement or arrangement then it will be treated as deposit. Further, whether interest is charged or not is immaterial.

      Thus, advance taken from customers by real estate company shall not be considered as deposits. But if it is not adjusted against the property in accordance with the terms of agreement or arrangement, then it will be treated as a deposit.

      13-10-2018 / 05:06:10 AM
      Reply
    • Dear Ma’am

       

      Advance from customer does not come within the ambit of deposit if taken to carry out the supply of goods and services within 1 YEAR from the date of acceptance.

      13-10-2018 / 05:07:08 AM
      Reply



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