FAQ

A chit fund transaction is one in which a predetermined number of people sign an agreement with the Chit Fund company to each subscribe a certain amount of money over a predetermined period of time in periodic installments. Each subscriber will then be entitled to the prize amount in turn, as decided by lot, auction, tender, or any other method that may be agreed upon.

The money invested in registered chit funds is quite safe, and these funds are supervised by the strict guidelines of the Chit Funds Act, 1982. For the length of the chit, the Chit Fund businesses must maintain a fixed deposit with a bank in the name of the Registrar of Chits, equal to 100% of the total chit amount of all the chits they have performed.

The Chit Fund Company does not invest the money it collects since all of the money it receives each month is paid to its esteemed customers; the only money it keeps is the commission that these subscribers are entitled to as part of their compensation.

By taking part in the auction, you can withdraw the prize money at any point starting in the second month. Once the necessary security and/or sureties have been provided, the prize money will be paid out in 30 days.

To safeguard the interests of the non-prized subscribers, security and sureties are necessary. This will facilitate the timely payment of other subscribers when they take the chit by guaranteeing that the valued subscribers continue to provide subscriptions on a regular basis.

Since chit fund businesses don't give its subscribers any dividends or interest, they don't deduct income tax at the source.