Tax Benefits of buying an electric car
Updated: Aug 26, 2021
What is Electric Vehicle?
An electric vehicle (EV]) is a vehicle that uses one or more electric motors for movement. An electric vehicle is generally powered by battery as a primary sources but new technology are solar panels, fuel cells or an electric generator to convert fuel to electricity
Benefits of using an electric car
Lower Running Cost
Easy to drive ( Due to Auto pilot feature )
More Environment friendly
Interest deduction under Income tax
A new section 80EEB has been introduced allowing a deduction for interest paid on loan taken for the purchase of electric vehicles from the AY 2020-21.
Only Individual who has taken a Loan for purchase of an Electrical Vehicle from any Financial Institution
Maximum Amount of deduction
The benefit of deduction under this section would be available from A.Y.2020-21 and subsequent assessment years till the repayment of loan continues. A deduction for interest payments up to Rs 1,50,000.
Why section was Introduced?
To promote Electrical Vehicles
To Reduces dependence on oil imports
To Reduces Carbon Emissions