Budget 2019 not only brings a new section 80EEA for interest exemption of addition Rs 1. 5 Lakhs for an affordable home loan, but also introduced section 80 EEB which would give tax exemption up to Rs 1.5 Lakhs on interest paid for the purchase of electric vehicles.
Both the section is introduced from FY – 2019-20 [AY2020-21].
Section 80 EEB at a grace!
The government of India has announced an incentive for purchase electric vehicle, in other words, they want to promote sells of electric vehicle (and this action may be the main cause to control pollution). A new section 80EEB has been introduced allowing a deduction for interest paid on loan taken for the purchase of electric vehicles from the AY 2020-21.
Under Fame India scheme and the promotion of uses of Electric Vehicle, Income tax department contributes and plays an important role for the buyer and the deduction up to one lakh and fifty thousand rupees in respect of interest on loan taken for the purchase of an electric vehicle from any financial institution subject to the conditions specified therein.
Also Read: – Section 80 EEA
Condition of Section 80 EEB
- The section is available only for individual not for HOU, Partnership firm, a company or any other type of taxpayer.
- The Loan must be section 1 April 2019 till 31 March 2023.
- The loan must be taken from a financial institution or a non-banking financial company for buying an electric vehicle only.
- The Deduction u/s 80 EEB of Rs 1.5 Lakhs is permitted for interest paid against Loan for purchase of Electrical Vehicle.
- The assessee how avail for this section must not own any other electric vehicle on the date of sanction.
- The most important point the exemption u/s 80 EEB not only permitted for 4 wheeled vehicles but also for 2 wheeled vehicles.
- The Section 80EEB Deduction will be over and above the regular deductions offered under the sections such as 80C, 80DD, 80D.
- The maximum amount of deduction under this section 80EEB in a financial year is Rs 1.5 lakhs.
- Only interest amount paid on your car loan is exempted under this section.
Is Section 80 EEB really work for the taxpayer?
Introduction of Electric vehicle is a promising step, but the question is why? Do we really slow down or pull over the pollution process.
No, I don’t think off! Generation of electricity (thermal, coal) also a major part of pollution, After sales increase of electric vehicles the pollution level from power generation plate increases.
Secondly, the price of an electric vehicle is so high, it is very difficult to afford the vehicle for the common man. Recently Hyundai Kona Electric launches his new electric vehicle 25.3 lakhs (ex-showroom India).
The maintenance and availability of the charging station, the infrastructure is not in the hands of consumers.
I don’t think the introduction of section 80 EEA is not the only reason to change people mindset and switch the customers to buy Electric Vehicle, rather the government work on building infrastructure.
Also Read: – Download Excel based Income tax calculator FY 2019-2020 [AY 2020-2021]
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Really worth reading the latest updates by finance ministry about income tax .