To promote the use of electric vehicles in India, the Indian Government has introduced a new deduction in respect of Interest payable for electric vehicles.
This deduction is available only for an Individual.
Applicability
- Loan has been taken for the purchase of electrical vehicle.
- Loan has been availed from bank or non-Banking financial company or any other financial institution.
- Loan has been sanctioned by the financial institution during the 01/04/2019 - 31/03/2023.
Amount of Deduction
Deduction can be claimed lower of;
- Interest Payable on loan for purchase of electrical vehicle; or
- Rs.1,50,000/-
For the purpose of deduction;
"electric vehicle" means 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.
"financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies, or any bank or banking institution referred to in section 51 of that Act and includes any deposit taking non-banking financial company or a systemically important non-deposit taking non-banking financial company as defined in clauses (e) and (g) of Explanation 4 to Section 43B.]
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