DPT 3 : Complete Guide

What is the meaning of Deposit ?

As per section 2(31) of the Companies Act, 2013,  Deposit includes any receipt of money by way of deposit or loan or in any other form, by a company(not a LLP), but does not include the receipt of money as per the prescribed list in the Rule 2(1)(c) of the Deposit Rules.

What is Exempted Deposit ?

The amounts received by the company but not considered deposits, Basically all the transaction which fall under the list provided in Rule 2(1)(c) are Exempted Deposits.

What are the type of returns under the amendment in the rules ?

DPT-3 is the Returns of deposits to be filed with registrar for -

a) Return of Deposits

b) Particulars of transactions by a company not considered as deposit (Exempted Deposits)

c) Return of Deposit and Exempted Deposits

As per Rule 16 of the Deposit Rules, annual return of deposits is required to be filed for (a)/(b)/(c) which were taken at any point of time and outstanding as on 31st March and return is required to be filed of every financial year.

Applicability of DPT-3 return:

All the companies except Government Companies, Banking Companies, Regd. NBFCs & HFCs.

Debated question: Whether insurance companies are required to file the returns in form DPT-3 ?

The first proviso to section 73(1) of the Act, states:

“Provided that nothing in this sub-section shall apply to a banking company and non-banking financial company as defined in the Reserve Bank of India Act, 1934 and to such other company as the Central Government may, after consultation with the Reserve Bank of India, specify in this behalf.”

On reading the definition of NBFC under the RBI Act, 1934, the following is given under section 45IA – “(f) ‘‘non-banking financial company’’ means– (i) a financial institution;

Further, the term “financial institution” is defined to mean “any non-banking institution which carries on as its business or part of its business any of the following activities, namely:–

(iv) the carrying on of any class of insurance business;

Vinod Kothari Sir View:

Accordingly, even though the Deposit Rules, extend the non-applicability to NBFCs registered with RBI, the same has to be read in limitation to the scope of the principal section and be interpreted in a manner that it does not travel beyond the scope of the section.

Hence, an insurance companies are not governed by the deposit provisions under the Act, and its allied rules.

View in ICSI Webinar:

However, MCA officials in the webinar of ICSI dated June 17, 2019 stated that since the insurance companies are not required to be registered with the RBI but with Insurance Regulatory and Development Authority of India (IRDAI), the deposit provisions will be applicable to it. Accordingly, the insurance companies are required to report the particulars of Exempted Deposits, if any, by filing one-time and annual return in e-Form DPT-3.

Is there any requirement of filing yearly/annual return for Exempted Deposits?

Yes. As per the inserted explanation under Rule 16, Form DPT-3 shall also be used as an annual return for filing details of Exempted Deposits.

What is the difference between one-time return and annual return?

As per Rule 16A(3) of the Deposit Rules, the One-time return is required to be filed for any receipt of the Exempted Deposits by the company for the specific period from April 01, 2014 to March 31, 2019 and outstanding on March 31, 2019.

if there is any amount in the Balance sheet which was accepted before 01.04.2014 and still it is there in the Balance sheet then this amount would not be required to be reported as the period was specifically provided as 01.04.2014 to 31.03.2019.

Whereas, as per Rule 16 of the Deposit Rules, the Annual return is required to be filed, for the outstanding receipt of Exempted Deposits by the company, which were taken at any point of time and outstanding as on 31st March.

Further, one-time return requires display of only the aggregate quantum of the Exempted Deposits and not the detailed break-up of the transactions.

But, on the other hand, the Annual return requires the detailed break-up of the Exempted Deposits against each of the categories mentioned in the Form as on March 31.

• No nil return is for annual return for DPT-3 is to be reported.

• Both one- time return and the annual return can't be filed in one Form. So, two different Forms to be filed for the two purposes.

• Certification: No certification by the practicing professional is required.

Auditors' certificate requirement:

The help kit of Form says, Auditor’s certificate is mandatory only if the Form is filed either as Return of Deposits or as Return of Deposits as well as Exempted Deposits.

Therefore, if the e-Form is filed as the Return of Exempted Deposits” (whether as one-time return or annual return), auditors’ certificate is not required to be attached.

Last date of closing of accounts:

For F.Y. 2019-2020 : 31.03.2020

For F.Y. 2020-2021 : 31.03.2021

Calculation of Net worth 

Intangible Assets:

The Net worth is defined under section 2(57) of the Act, but for the purpose of DPT-3 = Other Intangible Assets means ALL the intangible assets and determination also has to be done with the applicable AS/IND-AS.

Does Capital Redemption Reserve (CRR) is required to be added for the purpose of calculation of net worth of DPT-3?

The Net worth of DPT-3 is slightly different from the original one, it only wants to include free reserves. Since Capital Redemption Reserve is a statutory, non-distributable reserve made for the purpose the redemption or purchase of a company's own shares. ... Subject to the company's articles, the capital redemption reserve may be: Used to pay up new shares to be allotted to members as fully paid bonus shares.

So, please ignore CRR while calculating Net worth.

Interest accrued and Due/not Due on Borrowings:

The word "outstanding amount in relation to loans or borrowings" comprises both principal as well as interest accrued and due. So,interest accrued and due would be reported.

Interest accrued but not due is not an outstanding liability as it is not even due, therefore, the same need not be reported. 

Miscellaneous expenses and preliminary expenses:

They can be further divided into two categories, one of balance sheet and another which is coming in P&L.

The amount of preliminary expenses which is coming in P&L is the amount of preliminary expenses written off during the year out of the total block. And the remaining amount will be shown in balance sheet. 

For the purpose of net worth, we have to take the figures appearing in Balance sheet.

Q. What is the meaning of closure of accounts, whether it is based on finalization of accounts or adoption by the shareholders?

Ans. The closure of accounts is neither linked to completion of audit nor finalization/approval of accounts by the Board nor adoption of the same by the shareholders, it simply means the date for preparation of accounts are being used, the date on which financial year of the company ends.

Q. What should be the base year for the purpose of giving details of net worth?

Ans. While filling the details in the of column of "Net worth of the company", the Form says to - "latest audited balance sheet preceding the date of the return". Since the date of return would be the last of the financial year i.e. March 31, accordingly, details as per the latest audited balance sheet preceding the date of return will be considered March 31, of the preceding year. Therefore for the return for FY 19-20, the net worth as appeared in the balance sheet of March 31, 2019 shall be considered.

Q. Should we include car loans for the purpose of reporting in DPT-3?

Ans. The basic purpose of reporting in DPT-3 form is to know the sources from which the company has raise funds. Therefore, car loans are not reported under DPT-3.

Further, please note that this form is for sources of funds of a Company and not for Sources of liabilities of Companies.