Introduction of Section 80EEB of Income Tax Act,1961
With the intention to encourage people to buy Electrical Vehicles, Deduction under section 80EEB was introduced on interest on loan taken to purchase Electric Vehicle.
Quantum Of deduction
Under the section, lower of the following is available as deduction
- Actual Interest paid on loan.
- 1,50,000/-
Eligibility
This deduction is allowed only for individual taxpayers. However, both resident as well as non- resident taxpayers can claim deduction under this section 80EEB provided other conditions are satisfied.
Conditions to be satisfied
The following conditions must be satisfied to claim deduction under this section
- The loan should be taken from a Financial Institution.
- Loan must be taken to purchase Electric vehicle.
- Loan should be taken between 1st April, 2019 to 31st March, 2023.
- No deduction of the interest has been availed under any other provision of the act.
Meaning of Financial Institution
- A banking company to which the Banking Regulation Act, 1949 applicable, or
- Any bank or banking institution referred to in section 51 of that Act
- Any NBFC taking deposit or
- A systemically important non-deposit taking non-banking financial company ( which means Non-deposit NBFC having total assets of not less than Rs.500 crore as per the last audited balance sheet and is registered with the RBI.
Points to be noted
- The deduction is allowed until the loan is repaid in full.
- There is no restriction on usage of electric vehicle i.e. personal or business purpose.
- Electric vehicle can be a two wheeler or a four wheeler.
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