Save More with EV Loan Interest Deductions under Section 80EEB
Tata Motors, the proud title sponsor of the IPL, recently steered the tournament into a sustainable future with its electric vehicles (EVs) as the official cars. This move aligns with the growing trend of premium electric vehicles, a sector in which Uno Minda is making significant strides with its advanced lighting and light metal technology. Meanwhile, Zomato is setting a global benchmark in sustainability; Rinshul Chandra, COO of Zomato’s Food Ordering & Delivery Business, announced their commitment to transition to a fully electric fleet by 2030 as a part of the Climate Group’s EV100 campaign.
The innovation of Electric vehicles (EVs) marks a significant step towards a sustainable future, reflecting the global shift towards greener energy sources. In an effort to promote the adoption of EVs, the Government of India has introduced various incentives, one of which includes tax relief on loan interest for electric vehicle purchases under the Income Tax Act, 1961. This provision, encapsulated in Section 80EEB of the Income Tax Act 1961, aims to ease the financial burden on individuals opting for electric vehicles, thereby encouraging more eco-friendly transportation options.
As per the said section “Electric vehicle" means a vehicle which is powered exclusively by an electric motor whose traction energy is supplied exclusively by traction battery installed in the vehicle and has such electric regenerative braking system, which during braking provides for the conversion of vehicle kinetic energy into electrical energy.
Interest payable on loan taken by a taxpayer from any financial institution for the purpose of purchase of an electric vehicle is allowed as deduction as per the provision of the Section 80EEB of the Income Tax Act, 1961.
Summary of the Section 80EEB of the Income Tax Act 1961:
• Interest expense deduction is allowed up to Rs.1,50,000 to an Individual for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.
• Loan taken for procuring Electric vehicle should be between time periods from 1st April, 2019 to 31st of March 2023.
As we mark a step closer to a greener future, whether you've availed of the exemption benefits under the said Section 80EEB or not. Make sure to avail the Interest deduction benefit if the aforementioned coniditions are fulfilled in your Income Tax Return.
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