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.
Benefits 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.
P.S. The government has also reduced the rate of GST on EVs from 12% to 5%. In addition to this, EVs are exempt from road tax and registration costs in some states. EVs are also exempt from green tax.