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

  1. Lower Running Cost

  2. Easy to drive ( Due to Auto pilot feature )

  3. More Environment friendly

  4. Low Maintenance


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.


Eligibility criteria

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

0 comments

Recent Posts

See All

Any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB ( deductee ) shall furnish his Permanent Account Number to the person responsible for deducti