Here is how buying an electric vehicle can help you save income tax
Electric vehicles are the future of the motor vehicle industry. The Government of India is also very keenly promoting the use of electric vehicles across the country. In 2019, the government announced a new provision for income tax exemption under section 80EEB from the assessment year 2021 onwards.
What is section 80EEB?
If you purchase an electric vehicle on loan, you can avail of an exemption of tax up to INR 1,50,000 during the repayment of the loan. This deduction can be available on vehicles bought for personal as well as commercial purposes.
Keep in mind the points given below:
1. The purpose of the loan must be documented for purchasing the electric vehicle from banking or financial institutions.
2. Electric vehicles with two, three, or four wheels can qualify for tax breaks.
3. Every vehicle bought between 1st April 2019 and 31st March 2023 will be considered under Section 80EEB and will be able to avail of the benefit.
4. The benefit is only available on one electric vehicle that you own.
5. You can not claim the principal repayment of a loan under section 80EEB. You can only claim tax deductions on the interest paid on the loan.
Other benefits of buying an electric vehicle:
The government of India has initiated an exemption on the customs duty for importing specific parts of the vehicle. The GST official committee has also proposed a certain rate of deduction on GST.
1. The Indian GST fitment group reduced the rate of GST from 12% to 5% on two-wheeler and three-wheeler electric vehicles.
2. They also reduced the rate of GST on electric vehicle chargers. Earlier, the rate was 18%, but now it is 5%.
3. An electric vehicle is exclusively run on an electric motor. Its main traction power is its rechargeable battery. An electric vehicle creates very less din. It releases no exhaust or spark plugs.
4. You do not need to worry about the peaking cost of petrol or diesel.
5. With the electric car, you get a luxurious vibe, and you also get to promote better environmental health.
6. The insurance providers in India are offering amazing and affordable car insurance options to protect your electric vehicles against third-party liabilities, law penalties, expensive car repair expenses, personal accident cover, etc.
Conclusion:
Today, fossil fuel costs are rising enormously, making it really difficult to maintain vehicles, not just that it is also harming the planet. Considering these factors, the Government of India is encouraging the rapid inclusion of electric vehicles in the Indian mobility industry. Various initiatives are being taken to make the purchase of electric vehicles more affordable and convenient for individuals, which can help them save on taxes and other costs.
Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.