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Income Tax Deductions on EV Purchase: During the last few years, the demand for Electric Vehicle in the country has increased rapidly. Troubled by the expensive petrol-diesel prices, the common man is now preferring electric vehicles. Compared to petrol-diesel vehicles, the fuel cost of electric vehicles is less. Also, buying an electric vehicle also helps in saving income tax. If you are also planning to buy an electric vehicle, then do not delay any longer, because the income tax exemption on this is going to end soon.
Private vehicles are a luxury product
The government has given concessions in both Income Tax and GST to promote E-Vehicle. As per the Income Tax laws, vehicles used for personal use are considered as luxury products. For this reason, you do not get any kind of tax benefit (EV Tax Benefits) on Auto Loan, but there is a special provision 80EEB in Income Tax Act, under which interest on buying electric vehicle by taking loan You can claim a deduction of up to Rs 1.5 lakh on the amount of Rs. It can be availed on both four wheeler and two wheeler vehicles.
GST on EV also less
Generally, GST is levied on vehicles at the rate of 18 to 28 percent. Apart from this, 15 percent cess is also levied on luxury cars. In such a situation, up to 43 per cent tax has to be paid on luxury cars including cess. At the same time, there is only 5 percent GST on all types of electric vehicles. In this context, these vehicles are cheaper. Income tax is also saved on buying them by taking a loan. Apart from this, many states give exemption in registration fee and road tax for electric vehicles.
Now this is how you get income tax exemption
Talking about income tax exemption, under 80EEB, to take advantage of tax savings, it is necessary that your loan was approved between 01 April 2019 to 31 March 2023. Apart from this, you must have taken a loan from a registered bank or non-banking financial company (NBFC) to buy an electric vehicle. If your loan is approved after March 31, 2023, then you will not be able to claim exemption of up to Rs 1.50 lakh in income tax. It is possible that this exemption will be extended in the coming times, but no such announcement has been made so far.
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