1. Male or female

2. Minor or major

3. Unmarried or married

4. Having separate income chargeable to tax

There are serious difference of opinion about source of the CAS.

-M V Tatwawadi, NAGPUR

As long as the contribution comes out of your income chargeable to tax, the rebate is available whether the child is male or female, minor or major, unmarried or married and has separate income or not.

1. I would like your opinion regarding investments in gilt funds of mutual funds vis-a-vis bond funds with regards to returns (I hope you will agree gilt funds are definitely safer).

2. Since the returns in infrastructure bonds are near 10 per cent currently and the Section 54EA/EB options are no longer available, are these still preferable to investing in PPF?

-Vinod Kumar Gupta, vkgupta-1999@yahoo.com

1. I prefer bonds. Yes, the gilt bonds are safer than bonds, but the difference is marginal.

2. The main advantage of infrastructure bonds accrue from their lock-in of only three years. Therefore, the bonds are better than PPF despite the fact that the bonds are covered by Section 80L up to an aggregate amount of Rs 12,000, beyond which they become fully taxable. PPF interest is 11 per cent fully tax-free.

I hold 1,200 shares of Bajaj Auto as follows:

1. 10 shares (face value of Rs 100) purchased on August 22, 1984 @ Rs 900 per share. These were subdivided into 100 shares (face value of Rs 10) on December 10, 1987.

2. The balance 1,100 shares are all bonus shares as follows:

June 6, 1988: 100 shares (bonus

November 25, 1991: 200 shares (bonus)

August 26, 1994: 400 shares (bonus)

October 20, 1997: 400 shares (bonus)

Total: 1,100 shares (bonus)

Since I wish to dispose off the entire lot of 1,200 shares under the recent buy-back announcement, I would like to know how much I would have to pay as longterm capital gains tax.

Roughly speaking, (even considering the entire lot of 1,200 shares as bonus shares, the longterm capital gains would be 1,200 shares x Rs 400/share = Rs 4,80,000.00. (Of course, there is always the possibility that the company would not buy back all the shares, but only a part).

To reduce the longterm capital gains tax, I would like to use Section 54EC and put Rs 4,00,000 in NABARD or NHAI bonds for three years.

If I retain the remaining Rs 80,000 (if necessary, Rs 50,000) for my domestic requirements:

1. How much capital gain tax would I have to pay?

2. Will there be any additional income tax to be paid, bearing in mind that a) I am a senior citizen; b) my estimated total income would be approximately Rs 70,000 during FY 2000-2001; c) I have a longterm loss of Rs 15,862 carried forward.

-S R Khambata, jamina