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S. Murlidharan

Will cash payments be a thing of the past now that multiple payments during a day each for below Rs 20,000 but aggregating to more than Rs 20,000 per day would be disallowed?

Sukumar Rastogi, New Delhi

I am afraid not. You see, accountants are a wily lot. In the wake of the seeming tightening of belts by the Finance Bill, 2008, they would now turn their sights on the day after. In short, the multiple payments on paper shown as having been made during the day would now be conveniently arranged over two days so that on a single day on paper there was no aggregate payment in cash of more than Rs 20,000.

Our company has been giving exemptions towards Children Education Allowance and Children Hostel Allowance without collecting any documentary evidence from the employees. Please clarify what are the requirements for availing the above exemptions.

Kiran, Guntur

These allowances are exempt in terms of Section 10(14) (ii) which are not predicated on the employee incurring the expenses for which the exemption has been granted, much less on he producing evidence in support of having incurred the expenses for which the allowances are meant. Hence your company is in the clear.

I plan to buy a Nano as soon as it becomes available in the market. Will I have to file an income-tax return if I own a car even though I am not required to file income-tax return otherwise, thanks to the reduction in the tax rates?

Pratiba Naik, Nasik

Please do not deny yourself the car for the fear of filing the return! Because the economic criteria scheme pursuant to which one had to file a return in any case whether one had taxable income or not was abolished a couple of years ago. Now you have to file return only if your gross total income exceeds the tax-free limit, which for you would be Rs 1.80 lakh for the AY 2009-10.

I am told there are changes in capital gains taxation. Does everyone have to pay tax on capital gains earned from the market?

Siddarth Seksaria, Udaipur

The tax on short-term capital gains from the share market which has been 10 per cent will now be 15 per cent, but the exemption to long-term capital gains from the share market continues as it was.

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