Mitrah Services Private Limited received a sum of ₹ 7,50,000 from Ms. Kavita, who is the sister of one of the Directors of the company. At the time…

Deposit: According to section 2(31) of the Companies Act, 2013, the term 'deposit' includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India. As per Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014, the following amount shall not be considered as deposits- Any amount received from a person who, at the time of the receipt of the amount, was a director of the company or a relative of the director of the private company. However, the director of the company or relative of the director of the private company, as the case may be, from whom money is received, is required to furnish to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board's report. In the given question, ₹ 7,50,000 is received by Mitrah Services Private Limited (a private company) from one of the relatives of a Director. Thus, when the relative furnishes a declaration that the said amount was received by her from her grandfather as a gift, then it will not be considered as deposit in terms of sub-clause (viii) of Rule 2(1)(c). As an additional requirement, the company shall disclose the details of money so accepted in the Board's report. Further, according to Rule 16(A)(2), it shall also disclose in its financial statement, by way of notes, about the money received from the directors, or relatives of directors. Thus, the ₹ 7,50,000 received by Mitrah Services Private Limited from Ms. Kavita does not constitute a deposit under section 2(31) read with Rule 2(1)(c)(viii), subject to the company complying with the Board's report and financial statement disclosure requirement.