1) How to give Alimony to wife legally so that we can have proof for paying alimony legally. Also what should be the preferred mode of alimony amount payment( Cash , cheques or any other legal way)?
In your MCD post nuptial arrangement or agreement by a memorandum of understanding, if there is a demand for alimony and an amicable decision has been arrived upon which has been reduced to writing, such terms will speak about the mode of settlement of alimony amount.
If there is no demand for alimony from her side, you can remain silent about it until she makes a demand for it.
2) what precautions should be taken while filing MCD , so that there are less chances of cheating by wife?
You can pay the settlement amount in instalments by making just a token amount for the present at the time of filing the petition and the remaining amount may be made either by cheque or DD or by cash in the presence of witness after attending the second motion and confirming the disposal.
3) My wife lives in UP while my hometown is in Haryana. Where do we need to file the MCD ? UP or Haryana Court?
A divorce case can be filed at the place of marriage or at the place where both last resided together or at the place where is presently residing
.4) When alimony amount should be paid to the party? While filing MCD or during final settlement(after 6 month).
Visit my answer to your 2nd question above.
5) Any other things needs to be taken care while filing MCD.
It depends on the prevailing circumstances.