Unlike pertrol and diesel vehicles for private use, EV owners can profit from the recently added clause called Section 80EEB.
An increasing number of people are opting for electric vehicles (EV) over petrol or diesel vehicles. This option is not only better for the environment, but is also more efficient as compared to traditional fuel-powered vehicles. Moreover, rising petrol and other fuel prices have triggered an increase in the number of customers who want to shift to electric vehicles. In India, electric vehicles are not only cost-effective, but they also have financial benefits.
Car for personal use is classified a status symbol/ luxury item under India's Income Tax rules, so employed professionals do not receive extra tax advantages on automobile loans. EV owners, on the other hand, can profit from the recently added clause called Section 80EEB.
Individuals who purchase EV on loan will be eligible for a tax reduction of Rs 1.5 lakh on the interest charged on the mortgage balance under this provision. There are plenty of electric vehicle models on the market, and with increased sales, some automakers are planning to introduce new models.
This tax exemption is available for both cars and 2-wheeler EV purchases. The section 80EEB is subject to some conditions.
Each person is only eligible for this tax benefit once. This indicates that only those who have never acquired an electric vehicle previously are eligible for a tax relief under section 80EEB on a loan. Only those who are financing an electric vehicle are eligible for this concession.
A loan from a financial institution or a non-banking financial company must be used to finance the EV (NBFC). The deduction is not available to businesses. Individuals are the only ones who will be able to take advantage of the tax cut.
Payoffs of any loans for EV purchase accepted between April 1, 2019 and March 31, 2023 are eligible for tax savings under the section. From fiscal year 2020-2021 onwards, tax incentives under section 80EEB are available.
An Electric vehicle purchase would not only save you money on income taxes, but it will also save you money on GST, since the government has reduced the amount from 12 percent to 5%.
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 "EV tax benefits in India: Everything you need to know before buying an electric vehicle in 2022")
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