Section 85 of The Chit Funds Act, 1982
Nothing in this Act shall apply in respect of
- (a)any chit started before the commencement of this Act; or
- (b)any chit the amount of which, or where two or more chits were started or conducted simultaneously by the same foreman, the aggregate amount of which does not exceed 1[such amount as may be specified, by notification in the Official Gazette, by the State Goverment].
Summary
- It also excludes chits that do not exceed a certain monetary limit.
- This limit is set by the State Government through a notification in the Official Gazette.
- If a foreman runs two or more chits at the same time, the limit applies to the combined total amount of those chits.
Practical examples
FAQ
1. Who decides the monetary limit below which a chit is exempt from the Act?
The State Government decides this limit and must publish it by notification in the Official Gazette.
Test yourself
Q1.Under Section 85 of The Chit Funds Act, 1982, what is the legal status of a chit that was already started before the Act came into force?
Q2.Under Section 85 of The Chit Funds Act, 1982, if a foreman conducts multiple chits simultaneously, how is the exemption limit for small-value chits calculated?
Q3.Under Section 85 of The Chit Funds Act, 1982, how does the State Government officially specify the monetary threshold below which the Act does not apply?
Q4.Under Section 85 of The Chit Funds Act, 1982, if the State Government notifies an exemption limit of 25,000 rupees, what happens to a foreman who starts a single new chit with a total value of 30,000 rupees?