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Details of additional features to be incorporated in a chitty software in
the light of new Chit Act
No need for branch accounting. Only Kuri and head office accounting is required.
Besides company auditing reports, additional statutory reports should be generated for chit registrar
Ticket transfer renamed as “Substitution of Subscriber”
Forfeitures renamed as “Removal of Subscriber”
CSD can not be collected but FD lean note is possible
Highlights
Every transactions relating to chit will be recorded with a common serial number
Late fee cannot be more than 12% per annum
Pass book loan can be provided on the amount paid by the non-prized subscriber
Chit security details will be maintained
Highlights cont…
Old pattern of Kuri accounting New pattern of Kuri accounting
Accounting difference between old and new pattern
Note: In case of multiple operational branches, branch accounting may require
Accounting
Paid up capital = 10,00,000+
Reserve (Minimum 10 % of last year net profit) = 50,000 + Profit (– Loss) = 3,00,000 +General Reserve = 2,00,000
Total NOF = 15,50,000
Suppose, Total sala of all commenced chits under new act is Rs. 1,00,00,000
Eligibility for starting new chit amounted to Rs. 55.00.0000
Now aggregate sala will be Rs. 1,55,00,000
Example
NOF Calculation
Fees1. Inspection of immovable property (section 20) - Rs. 25.00
2. Application for previous sanction (2 of section 4) - Rs. 25.00
3. Filing a chit agreement (1 of section 7) - Rs. 10.00
4. Filing copy of the minutes of proceedings (section 17) -Rs. 2.00
4. Certificate of commencement (2 of section 9) as per the table below
Stamp duty for chit registration - 2.5% of sala.
Chit Amt From Chit Amt To Fee (Rs.)
Up to 5000 10.00
5001 10000 25.00
10001 15000 50.00
15001 20000 100.00
20001 25000 150.00
25001 1,00,000 250.00
Above 1,00,000 750.00
Important fees & levies
Important fees & levies cont…
5. Various fees for chit audit and inspection by registrar (under section 24 and 46)
Chit Amt From Chit Amt To Fee (Rs.)
Up to 5,000 25.00
5,001 15,000 60.00
15,001 25,000 120.00
25,001 50,000 200.00
50,001 1,00,000 500.00
Above 1,00,000 1000.00
Registrar of Chits – Regulating and monitoring authority
Central Excise – Collection of Service Tax on income
IT Department – Collection of TDS on payment
Authorities concerned
Service Tax
Taxable income : Foreman commission Interest Late fee *
Taxable portion : 70 %Rate of Tax : 12.48 (S T 12%, Edu. Cess 2% & H. Edu. Cess 2%)
Primary exemption : 10,00,000
Taxes to be managed
TDS
Taxable Expenses : Canvassing commission Collection commission
Sitting Fees Taxable Amount : Payment exceeding 5000 at a time or 20,000 in a financial year to a party Rate of Tax : 10 %
* Please take clarification from your chartered accountant
It is suggested that, separate bank accounts may be maintained for the following transactions.
To deposit/payment of chit amount collected from subscribers
To release chit amount to prized subscribers (optional)
To transfer and payment of removed ticket amount
To transfer and payment of chit amount that not paid on due date
To maintain company transaction other than chit.
Bank account’s operation
Account No1
Account No 2
Account No 3
(Optional)
Account No 4
Account No 4
Deposit all chit receipts/payment
Chit Amt. payable
Fore
man
com
miss
ion, i
ntere
st, l
ate
fee
Removed ticket Amt.
Chit Amt. that not paid on due date
Manage other Receipt and payment
Payment of chit Removed ticket Amt.
Payment of chit Amt.
Payment/receipt adjustment of chit amt. payable after due date
Transfer
Model of bank operation
Process and preparation of forms and details required for
chit registration and other relevant activities with registrar
of chit.
Sample screenshots taken from Integra Chit Plus Software
Primary Setup
To incorporate primary details of foreman, registrar and directors of the company
Step1
Chit Designing
Design your chit as per the Central Chit Act.
Step2
Create Security Step3
50% as cash deposit and 50% as bank guarantee Or
Govt. securities amounted not less than 1.5 times of chit sala
Or Immovable property valued not less than 2 times of chit sala
In case of multiple division, deposit amount will be multiplied by division
Example:- Chit sala = 5,00,000 Total division = 3 Total security required = 5,00,000 X 3 = 15,00,000
Enter Security Details Step4
(Application for certificate of sufficiency of security for conducting a chit)
Take Print out of Form No X Step5
Preparation of Form I
(Application by a Foreman for obtaining previous sanction to commence or conduct a chit)
Step6
Printout of application Form I Step7
Preparation of Annexure Step8
Printout of Annexure Step9
Submit Application
1. Application form No I & Annexure
2. Security sufficiency Certificate
3. Details of NOF
4. Copies of the chit agreements- draft
5. Copies of audited balance sheet of last financial year
6. Auditor’s report on accounts for remaining period
7. Copy of incorporation certificate
8. Copy of memorandum and article of association
9. Board resolution to start chitty
10.Fee Rs. 25.00
Submit application to Deputy Registrar of Chit, Through Assistant Registrar of chits along with following attachments and details.
Step10
Enter Previous Sanction
GET your previous sanction and enter details in to software
Step11
Announce chit and subscribe tickets
Step12
Chitty Registration
Preparation and submission of Form No II & Form No VIII for Chitty Registration
Step13
Printout of Form No II Step14
Preparation of Form No VIII (Chit agreement) Step15
Take printout of Form No VIII Step16
Declaration by Foreman
RECEIVE Chitty Registration and prepare form No V (Declaration by Foreman)
Step17
Commencement of chits
Enter details of commencement
Step18
Now Chitty Commenced
Step19
A register of subscribers will be generated in Form XIII.
A ticket (subscriber) ledger will be generated in Form XIV.
A day book will be generated in Form XV.
A receipt will be provided in duplicate in Form XVI
A book containing details of notices issued to the subscribers.
A book containing the minutes of the proceedings of each draw
Registers and books to be maintained
A file containing true copies of notice issued to the subscribers.
A file containing chit application by the subscribers.
A file containing authorization for participating in the auction of the chit subscriber
A file containing the vouchers for payment made by the foreman.
A file containing documents relating to securities offered by the prized subscribers.
Files to be maintained
Balance sheet:Time for submission
Within a period of three months from the expiry of financial year
Form XXVIII:- Receipts and Expenditure account and statement showing the assets and liabilities of the individual chit group.
Time for submissionFor those chits, the duration does not exceed one year - Within two months from the termination of
the chit
If the duration of chit exceeds one year - on expiry of every period of twelve months and also on the
termination of the chit.
Filing reports and statement with Registrar
