Keeping transparency in recording one's income and assets will pay dividends over the long term. Be it tax scrutiny or getting admission of your child to a foreign university, a clean record of inflows and assets is the predominant. Here are the ways to keep your accounts clean.
Channel inflows into a bank account -
It is indispensable to maintain a bank account, which forms an evidence of your financial history. It is prudent that all the inflows are channeled into a single bank account, and the inflows are marked specifically so as to avoid any confusion in future and keep a tab on it.
Pay the taxes -
Instead of evading tax by means of non-disclosure of income from other sources, it's best to be away from legal hassles. Moreover, look for possible exemptions and deductions to save taxes but stay away from evading it as it will only invite troubles.
Avoid paying cash -
Abide by the law that mandates payment of above Rs. 20,000 only through bank account. It is very convenient to buy things in cash but in this way a person is only helping the black economy. An income recorded in a bank account and spent in cash will not help an individual maintain a transparent record. Hence, it is only in your own benefit to make most of the payments through the same bank account.
Assets in proportion to income -
An average salaried person cannot hold crores of properties as assets, until and unless it is inherited and is being accounted. Assets are created only in proportion to income from known sources; therefore, holding assets that are not aligned with income can lead to legal troubles.
In the end, undervaluing assets and income may work well in India, but the laws of the foreign nations are stringent and can hinder one's child future. Hence, it’s wise to remain transparent than to be sorry later.