In the full Budget, presented on July 5, 2019 a new
section 80EEB was introduced which would requite tax exemption up to Rs 1.5
Lakhs on interest paid for purchase of electric vehicles provided it fulfills unrepeatable
conditions.
Eligibility Conditions
for 80EEB
Following are the eligibility conditions
for Section 80EEE:
1. The
loan should be sanctioned by the financial institution (banks, NBFCs, etc)
between April 1, 2019 to March 31, 2023
2. Only
the interest part of the loan is eligible for deduction u/s 80EEB
3. The
maximum value of deduction under this section 80EEB in a financial year is Rs
1.5 lakhs
4. This
is over and whilom 1.5 Lakh deduction u/s 80C
Would Tax Payers Goody by 80EEB?
The move is in the right government from environment
perspective as it would help somewhat in faster adoption of electric vehicles.
As of today, we do not have much nomination for electric cars. There’re just
two electric cars and both by Mahindra:
1. Mahindra
Verito (Rs 8.5 to 9.5 Lakhs)
2. Mahindra
e2o PLUS (Rs 8.5 to 11.5 Lakhs)
Assuming car loan of Rs 8 Lakh for 5 years at 11%
interest the EMI would be Rs 17,394. Over the 5 years the total interest outgo
would be Rs 2.44 lakhs and thesping to be in 30% tax bracket, you would save Rs
72,000 in taxes.
don’t think just this is going to push people to buy
electric cars as the infrastructure to run these cars is still not in place
yet. However, by giving clarity for next 5 years well-nigh the tax break,
everyone from car companies, infrastructure builders to consumers may pension
an eye on emerging new electric vehicles. In this Budget the GST on electric
cars have been reduced to 5% – which would remoter help in lowering the cost
But for now very few tax-payers would be worldly-wise
to take tax goody of Section 80EEB.
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2)
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3)
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4)
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