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one chit fund contribution at a time.

Ans: Chit Funds are a popular savings and borrowing platform comprising a group of subscribers/members. Each subscriber contributes a fixed amount on a monthly basis to a common pool known as the ‘pot’ or ‘chit value’.

Every month, an auction is held, and members bid for a discount on the chit value. The member offering the highest discount (also known as the auction discount) wins the prize money (prize money = total chit value minus auction discount). 5 or 7% of the pot is reserved as the foreman’s commission.

The amount for the foreman’s commission is subtracted from the auction discount, and the remainder of the discount is distributed equally among all the members of the group as a dividend (also known as a chit dividend).

This process of auctions, identifying the prized subscriber (winning bidder), and dividend distribution continues until all members have won a bid.

Note: The prize money won by the prized subscriber serves as the borrowing instrument for him/her and must be repaid to the chit company through instalments.

Ans: Yes. STV Chit Funds operates in full compliance with the Chit Funds Act, 1982, and is registered with the concerned Registrar of Chits, ensuring legal and regulatory oversight.

Ans: Absolutely. All collections are managed under strict regulatory supervision, and our processes ensure transparency and security at every stage of the chit cycle.

Ans: Any individual who meets our basic eligibility criteria and complies with KYC requirements can become a member. We also have plans tailored for salaried individuals, small business owners, and self-employed professionals.

Ans: In case of non-payment, late fees or penalties may apply as per the chit agreement. Continued default can lead to disqualification from the group, and legal action may be initiated to protect the interests of other members.

Ans: The payout (also called the "prize amount" or “prize money”) is given monthly to one member through a bidding process in an auction. Members can choose to bid based on their needs, and the process is conducted transparently. Upon successful bidding, the prize money is speedily disbursed to the prized subscriber subject to compliance with chit fund rules and KYC norms.

Ans: Income from chit dividends may be treated as taxable on a case-by-case basis. If an individual who invests in chit funds has not suffered any losses elsewhere (in business/profession/investments), and his/her earnings from chit dividends contribute to gains/profits, such dividend income may be deemed taxable under relevant sections of the Income Tax Act, if applicable. You may always reach out to your tax consultant to seek help on this matter.

Ans: Foreman refers to the chit fund company.