Mr. Romit is an employee of PQR Trading Private Limited. As per his contract of employment, his annual salary is 5,00,000. Mr. Romit paid to the…

Rule 2 (1) (c) of the Companies (Acceptance of Deposit) Rules, 2014, states various amounts received by a company which will not be considered as deposits. As per rule 2 (1) (c) (x) any amount received from an employee of the company not exceeding his annual salary under a contract of employment with the company in the nature of non-interest-bearing security deposit is not considered as deposit. In the instant case,5,30,000 was received by PQR Trading Private Limited as a non-interest-bearing security deposit, from its employee, Mr. Romit, who draws an annual salary of 5,00,000 under a contract of employment. Accordingly, amount of 5,30,000 received from Mr. Romit, will be considered as deposit in terms of sub-clause (x) of Rule 2 (1) (c) of the Act, as the amount received from Mr. Romit is more than his annual salary of 5,00,000.