WANT TO GET TAX BENEFIT? BUY ELECTRIC VEHICLE
In the union budget 2019, the government has announced an incentive for purchase electric vehicle. In the budget speech, the finance minister has stated that advanced battery and registered e-vehicles will be incentivised under the scheme. 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.
Features of Section 80EEB
The deduction under this section is available only to individuals. This deduction is not available to any other taxpayer. Thus, if you are a HUF, AOP, Partnership firm, a company, or any other kind of taxpayer, you cannot claim any benefit under this section.
Amount of deduction:
A deduction for interest payments up to Rs 1,50,000 is available under Section 80EEB. An individual taxpayer may have an electric vehicle for personal use or for business use. This deduction would facilitate individuals having an electric vehicle for personal use to claim the interest paid on the vehicle loan.
In case of business use, an individual can also claim the deduction up to Rs 1,50,000 under section 80EEB. Any interest payments above Rs 1,50,000 can be claimed as a business expense. To claim as a business expense, it is necessary that the vehicle should be registered in the name of the owner or the business enterprise.
Do note that an individual taxpayer should obtain the interest paid certificate and keep the necessary documents such as tax invoice and loan documents handy at the time of filing of the return.
Conditions for claiming the deduction
Let us know the benefits of buying an Electric Vehicle. 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. :
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