Buy an EV to save tax
Get an Income tax deduction for Interest on EV loans!
We think more and more people are going to be using this deduction as we move forward.
As more and more people consider buying Electric Vehicles (EV) in India, it’s probably a good idea to understand the tax benefit.
· Conditions for claiming the deduction
This deduction is available for all individuals. This deduction is not available for HUF, Partnership, Company, LLP or any other entity. It is restricted to Individuals.
Note that there is no requirement to have business income to be able to claim this deduction. If you are freelancer using Section 44ADA (presumptive taxation), you can still take an additional deduction for interest on Electric Vehicle Loan.
Amount of deduction
Deduction of INR 1,50,000 is available.
Conditions for claiming the deduction
· Loan should be sanctioned between 1 April 2019 to 31 March 2023.
· Loan should be taken from any financial institution.
· “Electric vehicle” has been defined to mean a vehicle which is powered exclusively by an electric motor whose traction energy is supplied exclusively by traction battery installed in the vehicle and has such electric regenerative braking system, which during braking provides for the conversion of vehicle kinetic energy into electrical energy.
Need help with figuring this out? Feel free to contact us. Our team of experts are always happy to help!