What is foreman commission in chit fund?

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.

How does chit fund work with example?

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.

What is dividend in Chitty?

The amount foregone by the winner of the auction is then distributed among the rest of the members, which is called the ‘dividend’. It is not received in cash but is deducted from the monthly installments that the member has to pay. Therefore he pays less than his actual installment.

Is GST applicable for chit funds?

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.

Which of the following agency is responsible for management of chit funds?

Regulator of chit funds is the Registrar of Chits appointed by respective state governments under Section 61 of Chit Funds Act. Powers of adjudication vest in the Registrar and the state government concerned is the Appellate authority.

Is there GST for chit funds?

12\% GST on Interest or Penalty Charged by Chit Fund Company.

Who regulate chit funds?

Registrar of Chits
According to the Chit Funds Act, 1982, the chit funds are registered and regulated only by the respective state governments. The latter appoint the Registrar of Chits, under Section 61 of the Chit Funds Act.

Which agency is responsible for management of chit funds?

Chit funds in India are governed by the Chit Funds Act, 1982. Under this Act, the chit fund businesses can be registered and regulated only by the respective State Governments. Regulator of chit funds is the Registrar of Chits appointed by respective state governments under Section 61 of Chit Funds Act.

Is GST applicable on Chitty?

How is chit fund taxed?

Tax on Income from Chit Funds Section 56 of the Income Tax Act states that if income of any kind is not exempt from tax but is not chargeable under any of the heads specified – salary, house property, business and capital gains – then, such income is to be included under the head income from other sources (IFOS).