Revolutionising commutes: Decoding the 80EEB electric vehicle tax benefit

Green growth and the use of sustainable energy is one of the prime priorities of India. India has committed to working towards sustainability and reduced carbon footprint. To achieve this the Union budget has taken a keen interest in sustainable energy usage by promoting the use of electric vehicles as a part of its commitment towards reduction in carbon emission. To promote the purchase of Electric Vehicles the government of India has introduced an initiative called the 80EEB Electric Vehicle Tax Benefit. Let us understand in detail the tax benefits related to these eco-friendly vehicles.

What is the 80EEB electric vehicle tax benefit?

The 80EEB electric vehicle tax benefit is an incentive introduced by the Government of India for promoting the use of electric vehicles thereby contributing towards the reduction of carbon emissions. It is one of the provisions of the Income Tax Act, of 1961. This section provides information related to the deductions that individuals can avail of on the interest paid on loans for the purchase of the vehicle.

Key features of section 80EEB

Eligibility Criteria:

The deductions stated under these provisions can be availed only by Individual taxpayers and no other taxpayer can avail the deductions.

Amount of deduction:

A tax deduction is available for interest payment on loans up to Rs 1.50 Lakhs.

Loan sanction period:

One of the most important conditions for claiming the tax deduction is the loan sanction period wherein an individual’s loan must be sanctioned between 1st April 2019 to 31st March 2023.

Types of electric vehicles covered:

The tax benefit is extended towards the loan taken for the purchase of 2-wheeler, 3-wheeler, and 4-wheeler.

How to claim the 80EEB tax benefit?

To claim the 80EEB tax benefit an individual need to follow the below given process:

1. The first and foremost important thing is to maintain proper documentation of the loan agreement. The tax benefit is only available to individuals having loan agreements sanctioned within the specified period as stipulated by the government.

2. Providing correct information related to the interest paid on the loan amount will help in filing and claiming the tax returns correctly under section 80EEB of the Income Tax Act.

Conclusion:

A few of the important points to be considered after purchasing a vehicle is to buy four-wheeler insurance and in case you purchase an electric vehicle then it is mandatory to purchase car insurance from Zurich Kotak General Insurance for electric vehicles as without a valid vehicle insurance online or physically it is illegal to drive the vehicle on Indian roads. The introduction of section 80EEB electric vehicle tax benefit is a commendable step taken by the government of India for incentivising sustainable commuting. This initiative not only promotes sustainability but also encourages individuals to purchase electric vehicles and contribute towards the reduction of carbon emissions leading to a reduction in air pollution and safeguarding our natural resources. Sustainability is the need of the hour and by buying electric vehicles we are taking a step ahead in safeguarding our nature and conservation of natural resources.

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