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You can Save Taxes by Buying an Electric Vehicle.

Whenever there is a spike in oil prices or climate change is debated and discussed, Electric Vehicles are mentioned as a part of the solution. In near future, Electric Vehicles (EV) may become the supreme form of transport in India. Greater incentivization by the government of India for both EV producers and users will accelerate the shift.

Various other measures for manufacturers like (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles Scheme, PLI Scheme) are taken by GOI to develop and promote the EV ecosystem in the country.

The Government of India to encourage the use of Electric Vehicles has introduced SEC 80EEB, which provides a Total Tax Exemption upto ₹1,50,000 on the Interest paid on a loan taken for purchasing Electric Vehicle. 

Now let us understand section 80EEB of the Income Tax Act 1961:
1. As per section 80EEB, while computing the total income of the assessee being an individual, a deduction for interest payments up to Rs 1,50,000 shall be available.
2. This deduction would facilitate individuals having an electric vehicle for personal use to claim the interest paid on the vehicle loan.
3. The loan should be taken from a specified bank or Financial Institution. 
4. The loan must be sanctioned anytime during the period starting from 1 April 2019 till 31 March 2023.

I know most of us don’t own an electric vehicle, but now how about owning one?

Let us know in the comments If you’re planning to buy an electric vehicle.