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Updated on Apr 30, 2023
Electric vehicles don’t pollute the environment as they don’t emit air pollutants and gases. Hence, they are termed as the future of the auto sector. Over the years, this industry is slowly and gradually getting popular among the masses in India. People are becoming serious about the use of these environment safe vehicles and have started adopting the ‘Go Green’ strategy.
Electric vehicles also present another advantage in the form of saving on petrol prices. With the increasing prices of petrol, it is becoming a huge burden on common people to drive these vehicles. Hence, they are opting for electric ones.
In addition, another important aspect of these vehicles is the income tax benefits on electric vehicles. Thus, along with their cost-effectiveness, electric vehicles are great in terms of tax benefits also. Let’s find out the various tax advantages allowed on electric vehicles.
Electric vehicle is a motor vehicle that runs with the help of an electric motor. Electric vehicles make use of a traction battery for the traction energy supply that is required for the running of the vehicle. These vehicles are equipped with a braking system in the form of electric regenerative. While applying brakes, the regenerative braking system converts kinetic energy to electrical energy.
The government offered many lucrative electric vehicle tax benefits in India over the years to encourage more and more people to use electric vehicles. Section 80 EEB was introduced recently to allow tax deduction on electric vehicle’s loan interest. So, if a person buys an electric car with a vehicle loan, he/she can save tax on the interest paid for the loan. This section was introduced to inspire people towards using eco-friendly vehicles for transportation.
Read More: Best Electric (EV) Sedan and SUV Cars in India
Below are the conditions under which one can claim deductions under electric vehicle loan tax benefits under section 80 EEB:
Here are some of the benefits received on electric vehicles:
To Conclude
Electric vehicles are indeed the future of the auto industry and people are gradually adapting to these vehicles with time. With the skyrocketing costs of petrol and diesel, it has become necessary to switch to EVs.
In addition, the government initiative on tax deductions have made electric vehicles more affordable now as compared to earlier. With electric vehicle insurance you can make sure to avail extra protection for your EV.
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Section 80 EEB of Income Tax Act of India allows deductions on the interest paid on a loan availed to purchase an electric vehicle.
Here are the things to keep in mind while buying an Electric Vehicle:
Consider Your Budget
Consider the incentives offered under your electric vehicle
Check the charging options
Maintenance cost of the vehicle
Battery performance
Mileage etc.
EVs are said to provide low maintenance cost as the servicing and upkeep charges are less in EVs as compared to regular vehicles. EVs have fewer moving parts and they do not have too many filters or fluids, so they are regarded as less expensive in terms of yearly maintenance as compared to petrol/diesel cars.
Since the GST or Goods and Services Tax on the sale of electric vehicles is reduced to 5% from 12%, it can be said that one pays less on electric vehicles.
Yes, you can get tax benefits on electric vehicles in India offered by the government under section 80 EEB and others. Also, the GST rate on EVs has been lowered to 5% from 12% that was charged earlier.
PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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