Sir,
I have a doubt with regard to Chit fund Business.. I understand the process of chit fund...But my doubt is about the last subsciber in the chit group. For Eg : 1,00,000/- chit group is formed for 20 months with 20 chit subscribers and monthly subscripttion of Rs.5,000/- and foreman commission is 5% and max. bidding allowed in 30% of the chit value. The month is eligible for Foreman of the company and second onwards subscriber bids for the chit amount and the prized subscriber will get discounted amount. this discounted amount minus foreman commission will fetch the dividend amount which is equally distributed among 20 subscribers in the group...Likewise, 3rd,4th ,5th month goes on and the last month only one subscriber will be remaning at 20th month...He will forego the Foreman Commission which is 5% of the value of chit and since there is no bidding at the last month; the subscriber will pay Rs.5000/- as last installment and get his payment of Rs.95,000/-. So the 20th month subscriber has to get the pinch of Rs.5000/- where there will not be dividend equally distributed among all the members for the last month ???? Can anyone explain how the logic works for the last subscriber for the group...
Regards,
tom
CAclubindia
