By Subhash LakhotiaTax & Investment ConsultantTax Guru : CNBC Awaaz
What not to do in the year 2014 is very important from the point of tax and investment planning in the year 2014, if you want to have a blissful happy life and if you want to have a wonderful experience in the wonderland of tax planning and investment planning, then here is a list of all those 14 items which you should not:
1. The first important item is not to think at all of tax evasion because tax evasion will result into penalty and prosecution. Avoid tax evasion.
2. Ensure that you do not make gifts to your spouse, your daughter in law. Otherwise the provisions relating to clubbing of income will be attracted. If at all you can’t resist making big new year gift to the spouse and the daughter in laws, then ensure that the investment by them is done in such vistas where the income becomes tax free.
3. Don’t think of buying a residential property just in your name only. Think of buying a new residential property in the year 2014 in your name as well as in the name of your spouse and major children and that too with loan so as to achieve maximum deduction for each of them on account of interest on loan to the extent of Rs. 1,50,000 per person.
4. Do not deposit during the whole year more than Rs. 1 lakh in the PPF Account of yourself and your minor children taken together. If you do so, you will lose interest on the amount deposited in excess of Rs. 1 lakh. Also ensure that you do not open Multiple PPF Accounts in the names of the family members in different banks.
5. Don’t think of buying a property with your funds but in the name of your wife. Tax wise this is not a good proposition. Better think of buying property with the funds of your wife and if no funds better give interest bearing loan to your wife and never Interest free loan to wife & Daughter in Law.
6. Don’t think of making investment in the stock market by taking loan bearing interest specially when you are contemplating to sell the shares after keeping it for a long time because when the gain on shares becomes Long-term Capital Gain, your interest on the loan so taken will not be allowed as a deduction.
7. Never make payment of Life Insurance premium for your parents, for your brother and for your sister. I know you love all of them but the fact remains if you make the payment the tax deduction will not be allowed to you as per section 80C.
8. Don’t buy or sell any property in any part of India lower than the circle rate because the difference between the price of the circle rate and the transaction price will be added to your income.
9. Don’t be hungry to receive gifts from non-relatives of an amount exceeding Rs. 50,000 in a financial year or else be ready to make payment of tax.
10. Never ever think of taking cash loan of an amount exceeding Rs. 20,000 from anyone in the world or else be ready to pay the penalty equal to the loan amount.
11. Whatever be your urgency during the course of your business or profession but never ever think of making cash payment of more than Rs. 20,000 to one person or else your expense even genuine will be disallowed by the Tax Department.
12. Don’t destroy your tax records for at least six years so that in case of reassessment proceedings you can show the records and papers and avoid all the tensions and worries from the Tax Department.
13. Don’t think of making purchase of property more than Rs. 50 lakhs or else if you want to purchase the property more than Rs. 50 lakhs, be ready to deduct tax at source at the rate of 1 per cent.
14. Don’t buy Gold & Gold Jewellery in a big manner or else you may be liable to wealth tax if net taxable wealth exceeds Rs. 30 lakhs. Better buy Gold Mutual Funds or Gold Bees.
The author is tax & investment consultant at New Delhi for last over 40 years. He is also Director of M/s R.N. Lakhotia & Associates & The Strategy Group.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
