Buying Electric Vehicle to get income tax benefit

Go green is the new mantra across the globe. Tax policies are designed to meet the socio economic objectives of the Government.

Now, Purchase of Electric Vehicles offers Tax benefits (Section 80EEB) and many more advantages.

Let us know the benefits of buying an Electric Vehicle (EVs). Taxpayers are eligible for deduction of Rs. 1,50,000 under section 80EEB on the interest paid on loan taken to buy Electric vehicles. The tax benefit is offered under section 80EEB. Let us know about it more:

1. Loan should be taken from a bank or specified NBFC.

2. Only the Interest part of the Loan is to be allowed as a Deduction.

3. Deduction cannot exceed Rs. 1.5 lakh and is allowed to claim from your total income from the financial year 2019-20 and onwards until the loan is repaid.

4. Loan has to be sanctioned between 1st April 2019 and 31st March 2023.

5. This deduction u/s 80EEB is allowed for Individual taxpayers only. However, if the individual runs a business as a proprietorship concern and the vehicle is used for the purpose of business then such assessee can claim it as a business expense in their books irrespective of the amount.

6. If any person is already claiming it as a business expense then they will not be eligible to claim the same expense twice.

The deduction u/s 80EEB is an additional tax benefits to promoter the “go gree” concept. Further, the rate of GST has reduced the rate of EVs from 12% to 5%. Further, EVs are exempt from road tax and registration costs in various states of the country.