What is Chitti process?
What is Chitti process?
In a chit fund scheme, a group of people contribute periodically towards the chit value for a duration equal to the number of investors (members or subscribers). The amount collected is given to the person, who is either selected through a lucky draw (lottery system) or an auction.
How are Chits calculated?
Amount collected per month = 20*1000 = Rs. 20, 000 – this is known as the Chit Amount. Once the first month’s payment is received, bids are invited from all subscribers. Any subscriber, who is in need of money, can bid for the chit amount, at a lower amount than it.
How do you calculate return on chit?
How do I calculate the annualised returns for a chit fund? One simple method is (Final Amount/ initial amount) = (1+r)^n, where n is the number of periods (say years) and r is the rate of return. Another method is to use the IRR function in Excel.
Is Chitty prize money taxable?
Tax on Income from Chit Funds The dividend income earned per month is neither tax deductible nor taxable. The overall income is taxable as income from other sources. The overall loss can be claimed as business loss. For instance, if a member at the end receives Rs.
What is Chitti money?
A chit fund is a type of rotating savings and credit association system practiced in India, Bangladesh, Sri Lanka, Pakistan other Asian countries. Chit fund schemes may be organized by financial institutions, or informally among friends, relatives, or neighbours.
Is GST applicable on Chitty?
Reply—Yes, GST is applicable on chit fund commission income. It will take part in your aggregate turnover and 18% GST is applicable on it. There is no basic exemption limit except the limit for registration which is Rs 20 lakh.
How do I calculate interest in Excel?
Excel RATE Function
- Summary.
- Get the interest rate per period of an annuity.
- The interest rate per period.
- =RATE (nper, pmt, pv, [fv], [type], [guess])
- nper – The total number of payment periods.
- The RATE function returns the interest rate per period of an annuity.
What is Kasar in chit?
KASAR is a monthly discount offered to chit holders in making the monthly payment. There is bid loss to the chit fund. In every auction, the chit would be bid and the bidder-member will auction the chit for his desired amount.
What is foreman commission?
Foreman’s commission: Under the Act, the ‘foreman’ is responsible for managing the chit fund. He is entitled to a maximum commission of 5% of the chit amount. The Bill seeks to increase the commission to 7%. Further, the Bill allows the foreman a right to lien against the credit balance from subscribers.