Compute annual income tax deductions up to ₹1.5 Lakh per year on interest paid for financing an electric car or electric 2-wheeler.
Deduction is available every year until the loan is fully repaid.
To promote eco-friendly mobility and accelerate EV adoption under the FAME initiative, Section 80EEB of the Income Tax Act provides an individual taxpayer with a tax deduction of up to ₹1,50,000 per year on the interest component of a loan taken to purchase an electric vehicle.
If an EV is used for business purposes by a sole proprietor, interest exceeding ₹1,50,000 can be claimed as a regular business expense under Section 36(1)(iii), alongside standard depreciation on the electric vehicle under Section 32.
| Attribute | Statutory Specification |
|---|---|
| Maximum Annual Deduction | ₹1,50,000 per financial year |
| Eligible Loan Period | Sanctioned between 1st April 2019 and 31st March 2023 |
| Eligible Assessees | Resident & Non-Resident Individuals |
| Deduction Tenure | Every AY until the loan is fully repaid |
No. Section 80EEB was available only for electric vehicle loans sanctioned up to March 31, 2023. Unless renewed in future budgets, newer loans do not qualify for personal 80EEB deduction.
No. The vehicle must be purely electric as defined in the Motor Vehicles Act and powered exclusively by an electric traction motor.
No. Section 80EEB deduction is not available under the default New Tax Regime (Section 115BAC).