Chit business query

465 views 1 replies

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

Replies (1)

You certainly have an interesting query, as per my thought

The last subscirber has already earned dividend previously in 19 auctions as he has not claimed the auction. The foreman commission is for the services of the foreman so it cannot be a part of profit / loss to the chit fund subsricber. Had be claimed before, for him the expense would be Commission + dividend foregone.

So lets treat 5000 as an operational cost for the holder for his security in the chit investment.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Related Topics
Loading
Company
ARTICLESHIP 04 June 2026
Article

Rakhecha & Co.

New Delhi

CA Inter

View Details
Company
20 June 2026
Chartered Accountant

ANV & Company

New Delhi

CA

View Details
Company
ARTICLESHIP 20 June 2026
Articleship

RB KESHRI & CO

Mumbai

B.Com

View Details
Company
09 June 2026
Accounts Associate

S Madan and CO

New Delhi

Graduate (Any)

View Details
Company
04 June 2026
Semi Qualified CA

Goyal Puneet & Associates

New Delhi

CA Final

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
Featured 26 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
01 June 2026
Audit, Taxation & Compliance Executive

R P S K & Associates

Nashik

CA Inter

View Details