One of the major disadvantages of this tax scheme is that you will lose the benefit of unlimited call charges if you move abroad or if you avail any international call facility provided by your service provider. In fact, this scheme has become quite popular with people who use mobile phones as their mode of communication and want to maximize the benefits of this facility. However, it has also come up with several disadvantages for individuals who have not been able to pay attention towards the norms related to tax. Some of the disadvantages of this scheme include:
The reduction in the number of deduction is one of the disadvantages associated with the six scheme. As one of the basic criteria for filing of tax returns with the government, possessing a mobile phone as one of the basic criteria for qualifying for mandatory filing of income tax returns will be withdrawn at the upcoming Budget. "Mobile phone is no more a luxury item. Most of us, who don't fall under the tax net now, have mobile phones.
Another disadvantage is that even if you have already paid taxes in the past and are making a new profile, then you may not qualify for getting the tax benefits on the newly set taxes. "Cease of loss of income" is another word that is used in order to make clear the point regarding this tax scheme. It means that the amount that you get as deductions (if any) will cease to be valid once you exit the scheme. Therefore, when you have entered the six schemes and have not paid the required taxes in the previous years, then you will have to pay the complete amount of taxes again seis advance assurance.
One of the major advantages of this tax scheme is that there is no need for a unit-holder to open an escrow account. "Open" here means that the money has been in the fund house for the entire year. When you first sign up in the six scheme, you will be given a notice that says that you need to open an escrow account. When you do so, you will be liable to pay a monthly installment to the fund house, which you should deposit in the bank account by 7:00 a.m. on the last day of every month. This particular scheme is known as "orderly fund opening", as the money is deposited into the account without any sort of delay.
"orderly fund opening" scheme is completely different from the "disorderly fund sale" scheme mentioned above. Here, the fund house has no right to ask the unit-holders to sell their units. "Disorderly sale" is a power which the fund house has to exercise when there is no buyer. The power is exercised only when the buyer is unable to pay for the house. Once the buyer is unable to pay, the fund house has no option but to sell the house to recover the money that it lent.
In order to apply these schemes, you will have to complete two different sets of documents. You will need to open an account with the bank which offers the scheme and you will have to create a new profile in the fund house. The new profile will show your name, address and account number. You will also have to indicate any rental income which you have made in the past six months. These details are taken care of by the system, which handles everything for you.
