Introduction of Section 80EEB
- Under this Section Deduction of interest payment on loan taken to purchase Electric Vehicle shall be available whether for person or business purpose.
- Deduction u/s 80EEB is available for 4 wheeled vehicles and also for 2 wheeled vehicles.
Quantum of Deduction under section 80EEB
The amount of deduction available under this section is given below :
- Actual interest payment on loan or
- Rs. 1,50,000/-
(whichever is lower)
Who are eligible deduction u/s 80EEB
- Only individuals are eligible to claim deduction under section 80EEB.
- 80EEB will be available to both resident and non-resident individuals.
Conditions to claim deduction u/s 80EEB
- The loan must be taken from Financial Institution and the loan must be sanctioned during the period between 01-April-2019 and 31-March-2023.
- Loan should be taken to purchase electric vehicle.
- The interest allowed under section 80EEB shall not be available under any other section of the Act.
Financial Institution means:
- A banking company to which the Banking Regulation Act, 1949 applicable, or
- Any bank or banking institution referred to in section 51 of that Act
- Any NBFC taking deposit or
- A systemically important non-deposit taking non-banking financial company ( which means
- Non-deposit NBFC having total assets of not less than Rs.500 crore as per the last audited balance sheet and is registered with the RBI.
Electric Vehicle
A vehicle which is powered exclusively by an electric motor whose traction energy is supplied exclusively by traction battery installed in the vehicle and has such electric regenerative braking system, which during braking provides for the conversion of vehicle kinetic energy into electrical energy.
Example :1
Santosh has taken loan for purchase electric vehicle during the financial year 2021-22. The loan is taken from the relatives and interest is paid Rs: 2,00,000. Is the section 80EEB eligible ?
Ans: In the above case, no deduction of interest shall be allowed since loan was taken from the relative.
Example-2
Santosh has taken loan for purchase electric vehicle during the financial year 2021-22. The loan is taken from the financial institution and interest is paid Rs: 2,00,000. Is the section 80EEB eligible ?
Ans: In the above case, deduction of interest shall be allowed since loan was taken from the Financial Institution and Santosh is eligible maximum deduction u/s 80EEB is Rs: 1,50,000.
