Is it possible to get a tax break if you finance the purchase of an electric vehicle? Yes, in order to encourage the use of electric cars, the government enacted Section 80EEB, which allows the loan used to purchase an electric vehicle to be written off in the same way as mortgage interest is.
Section 80EEB will be inserted beginning with the assessment year 2020-21. If the following conditions are satisfied, the deduction is authorized under this section.
How much of a tax deduction is permitted by Section 80EEB in total?
If the aforementioned conditions are satisfied, a person may use Section 80EEB to write off costs. The deduction is limited to the lesser of Rs. 1,50,000 or the outstanding loan interest. As I said before, the deduction is available starting with FY 2019–20 and subsequent assessment years.
Remember that you are only permitted to deduct interest once. Under any other provision of the act, interest that has already been deducted once under section 80EEB is not eligible to be deducted again for the same or any later assessment years.
You must obtain the interest paid certificate and have the necessary records on hand when filing your taxes, including tax bills and loan papers.
We must draw the conclusion that at this time, only loans issued for FY 2019–20 to FY 2022–23 are eligible for the tax benefit based on the information presented above. However, there is no restriction on how long the loan should run because tax benefits associated with such loans can be claimed up to the loan’s completion.
