New Delhi: Electric vehicles or EVs are not just good for the environment but are also proving to be more efficient than traditional fuel-powered cars.
Furthermore, rising petrol and other fuel prices have contributed to many customers’ desire to switch to electric vehicles.
EVs are not only cost-effective but also have tax advantages in India.
The report titled ‘Electric Mobility in Full Gear’ stated that States such as Delhi, Gujarat, Maharashtra, Meghalaya are focusing on demand incentives, whereas Karnataka, Tamil Nadu, Andhra Pradesh, Telangana are focusing on manufacturer-based incentives.
As per India’s Income Tax rules, cars for personal use are considered as luxury products and thus salaried professionals do not get any tax benefits on car loans.
However, EV customers can avail of tax benefits on their loans under a recently added section called 80EEB.
Looking to promote the use of electric vehicles in India, the government came up with a new section to give tax relief to EV buyers.
There is no shortage of EV models in the Indian market and with rising sales, several automakers are set to launch new models in the coming year.
Under Section 80EEB, persons opting to buy an EV on loan will be eligible for tax deductions Rs 1.5 lakh on interest paid on the loan amount.
This tax benefit makes choosing an EV as the next vehicle purchase an attractive proposition for salaried professionals.
Tax deductions on loan for EVs
Under section 80EEB, a total tax exemption of up Rs 1,50,000 can be availed when paying off the EV loan. This tax exemption is available for both 4-wheeler and 2-wheeler EV purchases.