Deductions and depreciation on an electric vehicles
E-vehicles, green vehicles, EVs are the new buzzwords in the market. Driving an electric vehicle can help to reduce carbon footprint because there will be zero tailpipe emissions. E cars are good for environment and also there are certain benefits available under income tax act. So lets understand the tax benefits on E-vehicle
Tax Benefits on e-vehicle for all class of Individual taxpayers:
If you are planning to buy an e-car and wants to avail loan for buying an e-car then you can get a deduction up to Rs. 1,50,000 under section 80EEB of the Income tax act of the interest paid on loan taken to buy Electric vehicles rom your total income .
Condition to avail deduction u/s 80EEB is that, the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2023.
Benefits for business taxpayers (Individual taxpayers)
Along with deduction of Rs. 1,50,000 under section 80EEB, proprietary businesses firms can claim depreciation @ 40% on electric vehicles if vehicles used for business purpose.
Additional Government Incentives
- GST rate reduction:
- The Goods and Services Tax (GST) rate on electric vehicles has been reduced from 12% to 5%, making EVs more affordable for both individuals and businesses.
- Exemption from Road Tax and Registration Costs:
- In many states, electric vehicles are exempt from road tax and registration costs, further reducing the overall ownership cost.
- Exemption from Green Tax:
- Some states also provide exemption from green tax on electric vehicles, which is another financial incentive to encourage their adoption.
