Many Indians are forced to rely on sources of cred... moreMany Indians are forced to rely on sources of credit such as non-banking financial companies (NBFCs), friends and relatives, and local money lenders. One such long-established alternative source of credit is chit funds, which are one of the earliest forms of peer-to-peer lending. Chit funds, if registered with a state government, are legal entities regulated under the Chit Funds Act of 1982; they do not fall under the jurisdiction of the Reserve Bank of India. In the government’s recent announcement of revised rates of GST, the tax that chit fund services attract has been raised to 18% from the earlier 12%. Let us examine the ways in which this increase in taxes will affect the chit fund business and, consequently, the people for whom it serves as an essential financial instrument. #gst #chitfund #finance #mint
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