Should Interest on Borrowings Be Reported in DPT-3?

Summary: Form DPT-3 is an annual return filed under Sections 73 and 76 of the Companies Act, 2013 read with Rule 16 of the Companies (Acceptance of Deposits) Rules, 2014 to report outstanding money received by a company that qualifies as deposits or exempted deposits as on 31st March. The article clarifies the treatment of interest on borrowings while reporting outstanding amounts. It explains that the principal outstanding must always be reported because it represents the money received by the company. Interest that has accrued and become due but remains unpaid should also be included, as it constitutes an existing outstanding liability and forms part of the amount payable by the company. However, interest accrued but not yet due should not be reported because it is only a future obligation recorded under the accrual method and has not yet become legally payable. The article also explains that accrued and due interest should be reported through the Adjustment column in Form DPT-3.

FORM DPT-3: SHOULD INTEREST ON BORROWINGS BE INCLUDED?
A Practical Guide for Companies and Professionals

1. Introduction

Every year, companies across India file Form DPT-3 with the Registrar of Companies (ROC). This is a mandatory annual return that captures details of money received by a company that is not classified as a “deposit” under the Companies Act, 2013.

One question that comes up frequently — from company secretaries, chartered accountants, and finance teams alike — is this:

“When I fill Form DPT-3, should I also include the interest that has been charged on my loans and borrowings? Or do I report only the principal amount?”

This article answers that question in a simple and structured manner.

2. What is Form DPT-3 and Why is it Filed?

Under Section 73 and 76 of the Companies Act, 2013, read with Rule 16 of the Companies (Acceptance of Deposits) Rules, 2014, every company that has received any money — whether it is classified as a deposit or as an exempted deposit (i.e., not a deposit under the rules) — is required to file Form DPT-3 with the ROC on or before 30th June of every financial year.

The form essentially asks: “How much outstanding money does the company owe to others under various heads as on 31st March of the previous financial year?”

The key phrase here is “outstanding money.” This is the foundation of our entire analysis.

3. The Core Question: What Does “Outstanding” Mean?

The form requires reporting of amounts “outstanding” in relation to receipt of money or loans. So the question becomes — when we talk about a loan or borrowing, what is the “outstanding” amount?

Let us understand this with a simple example.

Suppose a company took a loan of Rs. 10 lakhs from a director. The interest rate is 12% per annum. As on 31st March:

• The principal outstanding is Rs. 10 lakhs
• Interest has been charged at Rs. 1.20 lakhs for the year
• Out of this, Rs. 60,000 has become due and payable (say, for the first 6 months), but has not been paid yet
• The remaining Rs. 60,000 has been accrued in the books but is not yet due (for the second 6 months)

Now, the balance sheet of the company as on 31st March will show — on the liabilities side:

• Under “Long Term Borrowings” or “Short Term Borrowings”: Rs. 10,00,000 (principal)
• Under “Current Liabilities — Other Financial Liabilities” or a similar head: Rs. 60,000 (interest accrued and due)
• Under “Other Current Liabilities” or similar: Rs. 60,000 (interest accrued but not due)

So the total liability in the books is Rs. 11.20 lakhs. But should all of this go into Form DPT-3?

4. The Three-Part Answer

Part A: Principal Amount — Always Report

The principal amount of any loan, debenture, or borrowing is clearly an “outstanding receipt of money.” This is what was actually received by the company. There is no ambiguity here — the full principal outstanding as on 31st March must be reported in Form DPT-3.

Part B: Interest Accrued and Due — Must Be Reported

Interest accrued and due is interest that has already been calculated, has fallen payable, but has not yet been paid by the company to the lender. In other words, it is a definite outstanding liability as on 31st March.

Under the accrual system of accounting (which all companies follow), once interest becomes due, it is a confirmed payable. The company owes this money to the lender — it has simply not yet been paid.

Now, when we look at the liability side of the balance sheet for loans and debentures, the figure shown often comprises both the principal and the interest accrued and due together (especially in the case of debentures and certain loan agreements). In such cases, the figure as appearing in the balance sheet — which includes accrued and due interest — is the “outstanding” amount, and accordingly, the same must be reported in Form DPT-3.

The logic is straightforward: if the company were to settle the loan today, it would need to pay not just the principal but also the interest that has become due. Hence, that interest is very much part of the “outstanding” liability.

Therefore: Interest accrued and due must be included in the amount reported in Form DPT-3.

Part C: Interest Accrued but Not Due — Need Not Be Reported

Interest accrued but not due is interest that has been calculated and booked in the accounts (as a matter of accounting prudence under the accrual method), but which has not yet legally fallen payable. It is not yet a legally enforceable demand. The lender cannot today go to court and demand this money — it will become payable only on a future date.

Since this interest is not yet “due,” it cannot be considered an “outstanding receipt of money” in the true legal and commercial sense. The company has not received this amount — it is merely a future obligation that has been anticipated in the books.

Therefore: Interest accrued but not due need not be included in Form DPT-3.

5. Summary of Treatment at a Glance

Type of Amount

6. Where to Show This in Form DPT-3 — The Adjustment Column

This is a very practical question. Form DPT-3 has a specific structure where details are entered for each category of money received (for example: loans from directors, inter-corporate loans, debentures, etc.).

Within the form, there is an “Adjustment” column. This is where the reconciling entries are made — i.e., amounts that are added or reduced from the principal figure to arrive at the correct outstanding amount.

Here is how it works in practice:

Step 1: Start with the Principal

Enter the original loan/debenture principal in the relevant column of DPT-3.

Step 2: Add Interest Accrued and Due in the Adjustment Column

Since the balance sheet figure for a loan may also include interest accrued and due (some companies club them together), and since this interest is an outstanding liability, it should be added through the Adjustment column in the form.

The Adjustment column is designed to capture exactly these kinds of additions or deductions — amounts that modify the principal figure to reflect the true outstanding balance.

So, if the balance sheet shows Rs. 10,00,000 as principal and Rs. 60,000 as interest accrued and due, and both together form part of the borrowing figure, then:

• Principal to be entered: Rs. 10,00,000
• Adjustment column — Interest accrued and due to be added: Rs. 60,000
• Total outstanding to be reported: Rs. 10,60,000

Step 3: Do Not Add Interest Accrued but Not Due

The interest accrued but not due, which may be sitting in “Other Current Liabilities” or a similar head on the balance sheet, should NOT be brought into the Adjustment column of DPT-3. This amount is not an outstanding receipt of money — it is merely a future payable that has been provisioned.

7. Why Does This Distinction Matter?

Some professionals take a conservative view and include even the interest accrued but not due in DPT-3, thinking it is safer to report more rather than less. However, this approach can be misleading because:

• Form DPT-3 is meant to capture “outstanding” receipts — amounts that are due and payable. Including amounts not yet due distorts this picture.
• It may create a mismatch with the balance sheet, which could invite unnecessary queries from the ROC.
• It could also lead to inflated figures being shown, especially for companies with large borrowings and high interest rates.

On the other hand, some professionals exclude even the interest accrued and due — treating DPT-3 as a “principal only” form. This is also incorrect, because it understates the true outstanding liability.

The correct approach, as explained above, is to include accrued and due interest (through the Adjustment column) but exclude interest not yet due.

8. Practical Tips for Filing

• Always reconcile the DPT-3 figures with the balance sheet before filing. The total outstanding as per DPT-3 should match the total borrowings and related outstanding interest (accrued and due) as per the balance sheet.
• Separately identify, from the balance sheet notes, the breakup of borrowings into — (a) principal, (b) interest accrued and due, and (c) interest accrued but not due — before populating DPT-3.
• For debentures, the treatment is the same. Debenture principal plus interest accrued and due = amount to be reported.
• Do not rely on the total balance sheet figure mechanically. Some companies show principal and accrued interest combined, while others show them separately. Understand the composition before filling the form.
• In case of any doubt about classification of a particular amount, a conservative approach is to consult the auditor or company secretary handling the matter.

9. Conclusion

To put it simply:

If the interest has become payable (even if not yet paid), it is an outstanding liability and must be included in Form DPT-3 — through the Adjustment column.

If the interest has only been accrued in books but is not yet legally payable, it need not be included in Form DPT-3.

This distinction — between “due but unpaid” and “accrued but not due” — is the key to correctly filling this form.

We hope this article brings clarity to a question that many professionals encounter while filing Form DPT-3. For any specific queries regarding your company’s filing, please feel free to reach out to our team.

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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).