- Advertisement -
Home Incometax Electric vehicle Loan Income Tax Benefit

Electric vehicle Loan Income Tax Benefit

- Advertisement -

The popularity of Electric Vehicle (EV) is growing. The electric vehicle is seen as a replacement for traditional petrol-based vehicles.

The prime reason is electrical vehicle addresses the rising issue of pollution and global warming. Additionally, it also addresses the issue of depleting natural resource petrol (fossil fuel). As we know that petrol is a finite resource and the price of petrol is growing almost every day. The cost of running EV is low compared to a petrol-based vehicle.

The government of India is promoting electrical vehicles heavily. A special income tax benefit under section 80EEB is announced by the government for EVs.

The new income tax section 80EEB allows a deduction for the interest paid on the loan taken for the purchase of EV. This section is applicable from AY 2020-21. In this post, I will share information about – What is electric vehicle? Which Electric Vehicles are available in India? Electrical Vehicle Loan and Income tax benefit for the Electrical vehicles.

What is Electrical Vehicle?

Electrical vehicles make use of electrical energy generated from the battery. There are two types of electric vehicle (1) Battery Electric vehicle (2) Plug-in Hybrid Electric Vehicle. Battery electric vehicle are pure electrical vehicle which make use of electrical motor. On the other hand, Hybrid vehicle are convertible and it offers mixture of battery and petrol.

Which EVs are available in India?

Following electric car and e-bikes available in India.

  • Hyundai Kona Electric
  • Mahindra e-Verito
  • Mahindra e2o
  • Tata Nexon EV 2020
  • TVS iQube
  • Hero Electric Photon 48V
  • Bajaj Chetak

Loan for Electric Vehicles

State Bank of India offers India’s first green car loan. It is known as green car loan for electric cars. The loan is offered in the age range of 21 years to 67 years. The repayment period of this loan is 3 years. The rate of interest for this loan is fixed which is 20 BPs lower compared to normal car loan interest rate. You can get loan up to 90% of vehicle value. The eligibility of loan amount is based on your income.

Income Tax Section 80EEB

  • The deduction under section 80EEB is provided only to the individual tax payers. This deduction is not provided to HUF, AOP, partnership firm or any other type of tax payers.
  • The deduction is provided only for interest payment. The maximum cap on the amount is Rs.150000. The electric vehicle can be purchased for personal usage or business usage.
  • In case of personal usage, you can claim interest payment up to Rs.150000. If car is used for business purpose any interest payment above Rs.150000 can be claimed as business expenses. In order to claim business expense, the car should be registered in the name of the owner or the business enterprise.
  • You require interest paid certificate at the time of filing income tax return. You need to take a loan from bank or financial institute to buy electric vehicle.
  • The loan must be sanctioned during the time period starting from 1 April 2019 till 31 March 2023.
  • The benefit is offered to 3 wheelers, 4 wheelers and electric 2 wheelers.

FAQ

#1 Who is eligible to get benefit under section 80EEB?

An individual who has taken loan for buying an Electrical vehicle from financial institution is eligible to claim benefit under section 80EEB.

#2 What is the amount of deduction that is eligible under section 80EEB?

Interest payment subject to maximum Rs.150000 is eligible for income tax benefit under section 80EEB.

#3 What is time period to enjoy this benefit?

The benefit of deduction under this section is available from AY 2020-21 till the repayment of loan continues.

#4 What evidence are required in order to get benefit under section 80EEB?

You need to provide interest certificate issued by bank or financial institution while filing income tax returns.

Subscribe to Blog

- Advertisement -
- Advertisement -

Stay Connected

16,985FansLike
2,458FollowersFollow
61,453SubscribersSubscribe

Must Read

- Advertisement -

Italy blocks export of Covid-19 vaccine doses to Australia, using EU powers for the first time

Prime Minister Mario Draghi's spokesperson Paola Ansuini confirmed the move to CNN, adding that Italy and the European Commission had agreed on the action....

KFF Health Tracking Poll: Economic Hardship, Health Coverage, And The ACA

Key Findings After one month in office, a majority of the public (62%) approve of the way President Biden is handling the coronavirus pandemic –...

Related News

Italy blocks export of Covid-19 vaccine doses to Australia, using EU powers for the first time

Prime Minister Mario Draghi's spokesperson Paola Ansuini confirmed the move to CNN, adding that Italy and the European Commission had agreed on the action....

KFF Health Tracking Poll: Economic Hardship, Health Coverage, And The ACA

Key Findings After one month in office, a majority of the public (62%) approve of the way President Biden is handling the coronavirus pandemic –...
- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here