How to lend money, what are the documents you should when you lend money?

One of my relative is in a big financial mess and it has become my responsibility to help him in this. I would like to make an agreement for the money lent. I have heard that you should take signature in a blank bond paper and take 3 cheques/ checks with the borrowers sign on it.

Is this valid, can some one help me in this?
The family system here in India emphasizes a lot on relationship and values, the person is from close family, so I am sucked in to this.

what will be my tax liability?

Hi! I work as consultant where my annual package is 3,36000. My monthly income is 28,000 without any breakup and PF deduction. After TDS, I get 25,180 every month. I have invested 6,000 in PPF and 30,000 in Sundaram BNP tax saver scheme. what will be my tax liability.

As my tax do not have any breakup how will i save tax? Please help me as im in a financial mess and the only earning member in my family.