The summer break in schools and colleges means it’s time for families to plan their annual excursion. Today, more and more Indians are travelling overseas to spend their holidays. So while planning a trip abroad, among the many mandatory things in the “to-plan” list is carry foreign currency.

One is aware of the conventional options of carrying foreign currency — either in cash or travellers cheques. But one of the secure and convenient options to carry foreign exchange is a pre-paid forex card. Pre-paid forex cards are front-loaded cards that offer an overseas traveller the convenience of using the card like a regular debit/credit card, security and also protection from currency fluctuations, cross-currency transaction charges and minimum transaction charges on a pre-paid forex card usage at ATMs overseas.

Benefits of multicurrency pre-paid cards Now, let’s illustrate the benefits of multicurrency pre-paid cards over traditional options: There’s no need to search for outlets/ branches to encash the amount loaded or convert currency Swipe the card at merchant outlets as well as for e-com transactions like a regular Debit/ Credit card If you lose your wallet, get the card hot-listed to secure the balance amount on it. You can withdraw cash from any Visa/ Mastercard ATM with minimal charges. Wide acceptability among 29 million merchants and at 1.65 million ATMs Offers on cards for dining, entertainment While the above gives us some of the direct benefits, the usage of multicurrency pre-paid forex cards has some commercial benefits also when compared to usage against a credit or debit card used overseas. While using a debit/credit card at merchant outlets/ATMs, you will be charged with cross-currency transaction charges additionally. You are exposed to exchange rate fluctuation as the prevailing exchange rate is applicable at the time of transaction, while in a forex prepaid card, you can lock the exchange at the time of purchase ATM-based transactions costs are higher as compared with minimum transaction charges on forex prepaid cards. At the same time, on a forex prepaid card, there are no transaction charges for transactions done at merchant outlets and for e-com transactions.

Further, there are many benefits of multi-currency cards over the traditional options. Simply put, it means loading a single card with multiple currencies. So an overseas traveller doesn’t have to burden himself by carrying separate cards for each currency if the trip involves travelling to multiple countries.

Additionally, it saves cross-currency charges since one spends in the local currency loaded in that card. For example, if you are going on a Europe tour, then a multi-currency card can offer you as many as six European currencies. These days, forex prepaid cards are available at bank branches and some banks also provide the facility of purchasing them online through net banking.

Apart from retail customers, corporates are using forex prepaid cards for their staff travelling abroad on various projects/assignment. They benefit from the use of a forex card as it covers exchange rate losses and at the same time, it gives them the ease in accounting for the travel claim settlement by staff.

The issuance of foreign exchange is guided by FEMA regulations such as a customer can load the card up to the maximum amount permissible as per the FEMA limit. For leisure travel, the customer can load up to $10,000 equivalent during a financial year. For business travel, the customer can load up to $25,000 per trip. The existing business of forex prepaid cards in India is approximately $2,500 million per annum and it is dominated by private sector banks.

The author is senior executive vice-president, business head - card payment products and merchant acquiring services, HDFC Bank. The views expressed in this article are his own

I, a senior citizen, wish to give some money as a gift to my daughter and her son, both major and earning. How much money can I give to each one of them at a time in a financial year? Are there any formalities to be observed? What will be the tax exemption limit for FY14 corresponding to the assessment year 2014-15 in my case? — Shiv Kumar Madan

Your queries are replied hereunder:-

a) You can gift any amount to your daughter or her son and the amount so received by them shall not be taxable as income in their hands. The gift can be of any amount in a financial year as there is no limit provided for in respect of such a gift in the Act.

b) You will be of 80 years on 25.12.2014. The exemption limit in your case would thus be Rs 2.5 lakh for the assessment year 2014-15 and Rs 5 lakh for the assessment year 2015-16.

I am a pensioner and paying instalments of a house loan and interest on it. Which ITR should I file? — SP Pasricha

In case you have only one house property in respect of which loan instalments and interest on principal amount will be paid, you can use ITR-1 (Form Sahaj). However, in case you have more than one house property, you should file your return in ITR-2.

I am a senior citizen (80 years) and my annual income is less than Rs 5 lakh. Is it now mandatory for me to file tax return annually? — Harbans Singh

A person above the age of 80 years having income of less than Rs 5 lakh is not liable to pay any tax. In view thereof, you are not liable to file a return under Section 139 of the Income Tax Act 1961 (The Act) provided you are not claiming any deduction under Chapter VI-A (dealing with various saving schemes and other such like payments) of the Act.

I was invalided out of defence service on account of 40% disability (surgical) in the medical category ‘EEE’. I am getting 50% disability pension as per new norms and service element pension for over 17 years. Is complete pension (disability + service pension) exempted from tax? — Surinder Singh

According to a letter dated May 6, 2000, addressed to Sudhakar Shukla, Director (Pensions), Government of India, Ministry of Defence, Department of Defence, New Delhi, by Samar Bhadra, under Secretary to the Government of India, the entire disability pension i.e. disability element and service element is exempt from tax. This exemption seems to have been provided under Section 10(18) of the Act.

After a change of guard at the Centre, a common man pins hopes on the new government, especially on Finance Minister Arun Jaitley, for more tax sops in the Budget.

Just to rephrase the old quote. “If wishes were horses, the tax payers would have got money from the government.” However, wishing is a basic and natural human instinct. In this article, I wish to dwell on some aspects from the common man’s perspective with regard to the limit up to which tax benefits are granted.

Higher deduction for home loan interest

The deduction of Rs 1.5 lakh for interest paid on a home loan in respect of a self -occupied house was introduced in 2001. Over 13 years on, the limit has remained the same. However, the prices of houses, specifically in metro cities, have skyrocketed during these 13 years.

The benefit of Rs 1.5 lakh gets exhausted on the small loan amount of Rs 15 lakh (approximate). It’s a fact that it is almost impossible to get a house in cities with such a small loan amount. So in order to fulfill the dream of owning a house with the help of income tax benefits, the Finance Minister has been requested to enhance the limit of interest paid on home loans to at least Rs 5 lakh per annum. This will give an impetus to the housing industry, thus boosting the economy in the long-run.

In respect of a house which is not occupied by the tax payer for his own residence, tax laws, at present, allow full-interest deduction on home loans. Logically, tax benefits on such interest should be fully available to the person who buys or borrows the house for the purpose of occupying it himself. It is expected that the Finance Minister will remove this anomaly and make the interest fully deductible irrespective of the fact whether the flat is self-occupied or let out. The self-occupied property rather justifies a weighted deduction in respect of such interest.

Increase in deduction under Section 80D

The costs of medical treatment have also gone up substantially and it is difficult to meet them, unless one has a health insurance cover.

At present, the benefit available for a health insurance premium under Section 80D is restricted to Rs 15,000 for a family. This is considered to be grossly inadequate, for example if a person aged 46 years wants to buy health insurance of only Rs 5 lakh for his family, comprising four members, he need to shell out Rs 27,000 as premium which is not fully covered under the present limit of Rs 15,000 under Section 80D. This is more important if one were to buy critical health insurance in order to ride over the phase of getting diagnosed with certain critical diseases. This reduces your earning capacity substantially and where the basic health insurance may not come to your rescue. I suggest that the finance minister should raise this limit to at least Rs 40,000 for each individual.

Since the government does not provide any social security measures for its citizens, this is the minimum what the government can do so that the tax-payer can afford health insurance with tax benefits.

Enhance Section 80 C limit

At present, Section 80 CCE allows an overall deduction of Rs 1 lakh in respect of various items of investment and expenditure — contributions to national pension scheme, provident fund, PPF, pension plan, ELSS, repayment of home loan, National Savings Certificates, tuition fee etc.

The limit of Rs 1 lakh on overall amount has been there since 2000 in one form of other. It is considered to be grossly inadequate under the prevailing macroeconomic scenario. I will urge the finance minister to at least double this ceiling (Rs 2 lakh) to boost domestic savings and investment in the country.

The author is CFO, Apnapaisa. The views expressed in this article are his own