[Siddarth_Ramani]

If anyone is planning to purchase Nexon EV or any other EV for that matter, please make sure to utilise the tax benefit under 80EEB of Income Tax Act.
Everyone is eligible for a deduction of upto 1,50,000 of interest paid on loans taken for the purchase of electric vehicles.

This is a deduction and not a tax relief. Meaning if your income is 10,00,000, you can get a deduction of maximum 1,50,000 and tax will be calculated on the remaining 8,50,000.

Mods not sure if this is the right thread to post this, please take appropriate action.

[raghupro]

Originally Posted by Siddarth_Ramani

If anyone is planning to purchase Nexon EV or any other EV for that matter, please make sure to utilise the tax benefit under 80EEB of Income Tax Act.
Everyone is eligible for a deduction of upto 1,50,000 of intrest paid on loans taken for the purchase of electric vehicles.

Few questions if I may ask.

1. Is this tax exemption of up to Rs. 150000 on interest component per year throughout the loan term or only once?

2. Is it applicable on any length of loan period?

[prateekchanana]

Originally Posted by Siddarth_Ramani

If anyone is planning to purchase Nexon EV or any other EV for that matter, please make sure to utilise the tax benefit under 80EEB of Income Tax Act.
Everyone is eligible for a deduction of upto 1,50,000 of intrest paid on loans taken for the purchase of electric vehicles.

This is a deduction and not a tax relief. Meaning if your income is 10,00,000, you can get a deduction of maximum 1,50,000 and tax will be calculated on the remaining 8,50,000.

Mods not sure if this is the right thread to post this, please take appropriate action.

Originally Posted by raghupro

Few questions if I may ask.

1. Is this tax exemption of up to Rs. 150000 on interest component per year throughout the loan term or only once?

2. Is it applicable on any length of loan period?

This is only valid if you register the car in individual name. If registered in name of company you are not entitled to these benefits.

Also this is only valid on interest component of the loan amount and not flat 1.5 lac based on value of car. If you take loan of 10 lacs and pay interest 50k in an year you can only claim a deduction of 50k and not the entire 1.5 lacs. You can read more here about the same.

You can claim the deduction on interest part for the entire loan period of you car.

Link

[Siddarth_Ramani]

Originally Posted by raghupro

Few questions if I may ask.

1. Is this tax exemption of up to Rs. 150000 on interest component per year throughout the loan term or only once?

2. Is it applicable on any length of loan period?

1. It is applicable only on interest component. Few conditions,
a). The loan should be taken before 31st March 2023
b). Purchase should be from an Individual and not partnership or corporate.

2. Yes it is applicable till the closure of loan. Meaning you can get the benefit for subsequent assessment years also. However the loan should be sanctioned before 31st Mar 2023.

[cool_dube]

Originally Posted by prateekchanana

If you take loan of 10 lacs and pay interest 50k in an year you can only claim a deduction of 50k and not the entire 1.5 lacs

Originally Posted by Siddarth_Ramani

Yes it is applicable till the closure of loan. Meaning you can get the benefit for subsequent assessment years also.

Please note that while the deduction can be spread across multiple assessment years (of course, within the loan tenure only), it is capped at INR 1,50,000. As an example - if I am paying an interest of INR 50,000 per year over a loan tenure of 5 years, I will be able to avail this benefit for first 3 years only.

Originally Posted by Durango Dude

point of owning an EV is to reduce carbon foot print

It is one of the key aspects but NOT the only one. "Ridiculously low running costs" comes to mind unless one owns an oil well For anyone who has been able to overcome his/her stigma and driven an EV even once, it is very very difficult to NOT get floored by the silent, refined, and zippy driving experience. More than anything else, EV-adoption is a mental block which is difficult (but not impossible) to overcome. I say this after hesitantly getting on the EV bandwagon about 5 years back, and now there is no looking back for me

[varkey]

Originally Posted by cool_dube

Please note that while the deduction can be spread across multiple assessment years (of course, within the loan tenure only), it is capped at INR 1,50,000. As an example - if I am paying an interest of INR 50,000 per year over a loan tenure of 5 years, I will be able to avail this benefit for first 3 years only.

Could you please point to some authentic documentation where this is mentioned? In all documentation around Section 80EEB I’ve seen so far the 1.5L cap is per assessment year, no where does it say it’s for an assessee over multiple assessment years.

If you notice all income tax caps are per assessment year, I’m yet to see one which is per assessee. It appears only you seem to be posting in multiple threads about the cap being per assessee. So I’d really appreciate if you can point us to someplace this is specifically mentioned.

Linking to another post of mine (Review: The Tata Nexon EV) as well.

[arvindmanju]

Originally Posted by cool_dube

Please note that while the deduction can be spread across multiple assessment years (of course, within the loan tenure only), it is capped at INR 1,50,000. As an example - if I am paying an interest of INR 50,000 per year over a loan tenure of 5 years, I will be able to avail this benefit for first 3 years only.

If we calculate Max savings in terms of income tax if one is in 30% tax bracket is upto ₹45K for one car, as against the max tax saving of ₹45k per year (considering the tax component is on higher side.)

[cool_dube]

Originally Posted by varkey

Could you please point to some authentic documentation where this is mentioned?

Please rest assured that I am responsible enough to not share information on this forum unless I am 100% sure about it I have a confirmation on this from multiple folks, including my CA as well as a few EV owners who have availed loans. If you are still not convinced, please refer to point no. 2 on this article, hosted on the website of Income Tax Department. Cannot get more authentic than this now, can it?

Originally Posted by varkey

This my first online booking for a vehicle and I’m not sure if it’s the same with other manufacturers, but it didn’t give a warm feeling about the process.

Don't worry. This is exactly how all online car bookings work.

[varkey]

Originally Posted by cool_dube

If you are still not convinced, please refer to point no. 2 on this article, hosted on the website of Income Tax Department. Cannot get more authentic than this now, can it?

Honestly I am not, cause the sub-section 2 clearly says the deduction of 1.5L is per assessment year. Also, the computation of total income is always per assessment year, never over the life time of the assessee or a loan.

The deduction under sub-section (1) shall not exceed one lakh and fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.

Any deduction that we have available is for a given assessment year, take it 80C or 80D or 80CCD and in each of them you'd see language used "shall not exceed so and so amount", does that mean all of them is once in a life time? Just to give an example, deduction under section 80EEA for first-time home owners with some conditions which was available till March, 2022. Are you saying even for 80EEA the deduction is only 1.5L during the entire tenure of the loan? The wording is very similar.

https://incometaxindia.gov.in/Acts/F...0000074073.htm

[cool_dube]

Originally Posted by varkey

Honestly I am not

In the interest of not digressing from the main topic of this thread, this is my last post on this topic. If you reckon that you know more than CAs and folks who have been availing this benefit for more than 2 years now, I rest my case

[GTO]

Originally Posted by Siddarth_Ramani

If anyone is planning to purchase Nexon EV or any other EV for that matter, please make sure to utilise the tax benefit under 80EEB of Income Tax Act.
Everyone is eligible for a deduction of upto 1,50,000 of intrest paid on loans taken for the purchase of electric vehicles.

Thanks for sharing, Siddarth_Ramani! Copying your post out to a new thread. A new thread means 100X the views & 100X the visibility in search engines, including Google. Will add to homepage later this week .

@ BHPians, if you should spot any good post in an existing thread that deserves its own new thread, please report the post and we'll move it out for greater visibility.

Thank you!

[Siddarth_Ramani]

Originally Posted by varkey

Honestly I am not, cause the sub-section 2 clearly says the deduction of 1.5L is per assessment year. Also, the computation of total income is always per assessment year, never over the life time of the assessee or a loan.

What BHPian @Cool_dube is saying is correct. As the old adage goes 'Old patient sometimes knows better than new doctor', he was correct in pointing that out. I'm a CA Finalist and this is what I work on daily. Even I missed the wording.
Bare Act says, ' Total amount of not exceeding 150,000 should be deducted from computation of income of assessee for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.'

It implies that a total of 1,50,000 deduction is available for the current and subsequent assessment periods combined.

[varkey]

Originally Posted by Siddarth_Ramani

Bare Act says, ' Total amount of not exceeding 150,000 should be deducted from computation of income of assessee for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.'

It implies that a total of 1,50,000 deduction is available for the current and subsequent assessment periods combined.

Okay, the wording is same for 80EEA as well ie for a home loan of up to 45L spread over 20-30 years. Are you implying even for 80EEA it’s 1.5L total?

Also, could you please point me to any other deduction where the total amount across assessment years is capped? Just trying to learn here.
My other thought is how else can that line be written to say that deduction can be applied for multiple assessment years? If you use OR there it would imply it can be used only for a single assessment year.

[biker92]

I agree with varkey. The same wording is mentioned in multiple places in the income tax department

Example:[Deduction in respect of interest on loan taken for certain house property.

80EEA. (1) In computing the total income of an assessee, being an individual not eligible to claim deduction under section 80EE, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.

(2) The deduction under sub-section (1) shall not exceed one lakh and fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.

(3) The deduction under sub-section (1) shall be subject to the following conditions, namely:—

(i) the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 23[2020];

(ii) the stamp duty value of residential house property does not exceed forty-five lakh rupees;

(iii) the assessee does not own any residential house property on the date of sanction of loan.

(4) Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

(5) For the purposes of this section,—

(a) the expression "financial institution" shall have the meaning assigned to it in clause (a) of sub-section (5) of section 80EE;

(b) the expression "stamp duty value" means value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property.




Also, my CA tells me that it can be claimed upto 1.5 lakh for the entire period.

[fhdowntheline]

Is this deduction applicable regardless of which IT assessment you use (old vs new) ?