To calculate the participation Chit dividend, you’ll need to understand how the monthly auction works and how the bid amount is distributed among members.

Dividend per person = Bid ​​amount ÷ Total members

Here’s a step-by-step guide to calculating the participation pool dividend:

Determine the Bid amount. This is the amount the winner agrees to forfeit from the total value of the participation pool.

Calculate the Commission

Commission = % of Commission × Participation pool amount. This goes to the organizer (foreman).

Calculate the Dividend

Total Dividend = Bid ​​Amount − Commission

Dividend per Member = Total Dividend ÷ Number of Members

Adjust the Monthly Dues

Original Dues = Chit Amount ÷ Total Months

Due Due = Original Dues − Dividend per Member

Monthly Savings or Return

Savings % = (Dividend per Member ÷ Original Dues) × 100%

Suppose:

Chit Amount = ₹5,00,000

Total Members = 50

Bid Amount = ₹1,75,000

Commission = ₹25,000

Then:

Total Dividend = ₹1,75,000 − ₹25,000 = ₹1,50,000

Dividend per member = ₹1,50,000 ÷ 50 = ₹3,000

If the monthly fee is ₹10,000, then the payment = ₹10,000 − ₹3,000 = ₹7,000

So each member pays ₹7,000 instead of ₹10,000 that month.