Security deposit


I have been working as a Senior Adviser in an International School in Rajasthan. It is in the Offer Letter that 10% of my Salary will be deducted from my Gross Salary till 2 Months Salary is deposited under Security Deposit Head. I am not holding any Position of keeping cash/valuables etc. Yes I have been given a Furnished Residence. Is it legal/lawful to deduct 2 Months Salary @ 10% every month. I am paying Income Tax on my Gross Salary where as I am not getting 10% of the salary and on the other hand Company is enjoying Interest on 10% of my Salary. Pl. guide. Man Jit Singh Sandhu
 
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Advocate

You file IT returns and seek refund of extra Income tax deducted on gross salary whereas you get 10% less as actual salary.
 
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Consultant

Sorry to differ with the views of Shri Vijay Raj Mahajan.

Security deposit, being refundable, is the personal liability of the employee, not allowed as deduction from IT.

If the querist handles cash and other valuables, he is liable to make adequate security deposit. He should rather be thankful to the school management that they have not required the querist to deposit lump sum as the total security deposit.

 

 
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