We all know that electric vehicles (EVs) are the need of the hour. If the increasing malevolent pollution and global warming are to be controlled, then the carbon footprint has to be reduced. And there’s no better way to reduce the mammoth emissions from the billions of fossil fuel-guzzling vehicles, than to adopt the alternative eco-friendly fuels and battery-operated cars.
It is undeniable that EVs are the choice that we all should make. However, many of us are deterred by the thought of the expensive tags that the EVs come with. Nevertheless, we should keep in mind the multiple advantages that EVs actually offer. EVs are more efficient and save you the trouble of worrying about the rising fuel prices. Moreover, EVs also offer you tax benefits. Yes, that’s exactly what we are discussing in this write-up. So, read on to get all details.. *
How EVs Can Save Your Tax?
Personal cars are considered as luxury commodities under Indian tax system and don’t offer any tax benefits on auto loans. However, as the electric vehicles are the necessity considering the uncontrolled global pollution issues, the Government of India is really taking steps to encourage the adoption of EVs. Hence, the government has created a new section, which offers tax exemptions to electric car owners. *
EV Tax Exemption Section:
As per the Union Budget of 2019, the government of India offers tax exemptions on the purchase of EVs, and this applies to both four-wheeler and two-wheeler electric vehicles. The government introduced Section 80EEB of income tax for providing tax benefits to EVs buyers. Under the section 80EEB, an EV buyer can avail of up to Rs 1.5 lakh tax exemptions on the loan amount. *
Electric Vehicle Insurance
The Electric Vehicle Insurance policy from Bajaj Allianz General Insurance protects EVs from any potential financial loss or damage in the case of incidents like accidents. Owners of electric vehicles can be protected financially in times of need by purchasing insurance, which helps protect them from any potential financial risks. Additionally, 11 roadside assistance services are included in our policy for your car, including a Dedicated EV helpline, on-site charging, SOS, out-of-energy towing, and many more. *
Eligibility Criteria For Section 80EEB:
The following are the criteria under section 80EEB to avail tax benefit on EV purchase:
- Under this tax exemption section, only individuals can avail this benefit. Hence, if you are a HUF, AOP, partnership firm, company, or any other kind of taxpayer, then you can’t avail this tax deduction.
- It is also to be kept in mind that the tax benefit will be offered only on the first EV purchase for one time for each individual. Hence, if you are a salaried professional and buying an EV for the first time, only then you are eligible for this tax benefit.
- Tax exemption can be availed under this section only if you are taking an auto loan to purchase an EV. Hence, the financing option to acquire your first EV will only let you avail this tax deduction.
- This section has come into effect from the 2020-2021 financial year onwards, so now is the ideal time to go ahead and avail it. *
Availing Tax Benefit on EVs:
If you are an individual taxpayer, then you need to obtain the interest paid certificate, tax invoices and loan documents and keep all these ready before filing for an income tax return (ITR), in order to get the tax reductions. *
Conditions to Claim Tax Exemption:
In order to avail tax exemption, the EV loan must be obtained from a recognised financial institution or a non-banking financial company, and the loan must be sanctioned anytime during the period between April 1, 2019, and March 31, 2023. *
Reasons to purchase Electric Car Insurance
A financial protection against potential liabilities is provided by the electric car insurance policy. Any time can be a time of uncertainty. The Motor Vehicles Act of 1988 mandates third-party insurance as a requirement. You can avoid getting into trouble with the law by having electric vehicle insurance. *
* Standard T&C Apply
Conclusion:
So, now you know that you can save up to Rs. 1.5 lakh on tax on the auto loan that you take to buy an electric vehicle. As this is an initial EV drive benefit offered by the government, now is the right time to bring home a new EV and get all the benefits. So, what are you waiting for? Get your first EV, get tax benefits, save on fuel costs, embrace the change and help the environment, all in one go.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.
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