Applicable to: Individual taxpayers
This section provides a deduction for interest paid on loans taken to purchase electric vehicles (EVs), encouraging eco-friendly transportation.
Key Features (AY 2025-26)
1. Eligibility Criteria
- Loan must be for purchasing an electric vehicle(2-wheeler, 4-wheeler, or commercial EV)
- Loan must be sanctioned between 1 April 2019 to 31 March 2023
- Vehicle must be new(not used/second-hand)
- Loan must be from financial institutions(banks/NBFCs)
2. Deduction Amount
- ₹1.5 lakh per year(for interest paid)
- Available for entire loan tenure
3. Required Documents
✅ Loan sanction letter (mentioning purpose as EV purchase)
✅ Vehicle registration certificate
✅ Interest payment certificate from lender
Comparison with Other Vehicle-Related Deductions
| SECTION | PURPOSE | MAX DEDUCTION | APPLICABLE TO |
| 80EEB | EV loan interest | ₹1.5 lakh | Individuals |
| Section 80C | EV purchase (principal repayment) | ₹1.5 lakh (shared limit) | Individuals |
| Depreciation (Business) | EV purchase for business | Up to 40% | Businesses |
Example Scenario
Loan Details:
- EV cost: ₹12 lakh
- Loan amount: ₹10 lakh
- Annual interest: ₹1.2 lakh
Tax Benefit:
- ₹1.2 lakh deduction(actual interest paid, up to ₹1.5 lakh limit)
Pro Tips
- Combine with state EV subsidiesfor additional savings.
- Check if your lender offers green vehicle loan discounts.
- Claim depreciation benefitif using EV for business.
FAQs
Q: Can I claim this for a used EV?
A: No, only new EVs qualify.
Q: Is this available for commercial EVs?
A: Yes, if purchased under individual ownership.
Q: Can I claim both 80EEB and 80C for EV purchase?
A: Yes (80EEB for interest + 80C for principal repayment).
Section 80EEB makes EV ownership more affordable by reducing taxable income. While the loan sanction period has ended (March 2023), taxpayers with existing EV loans can continue claiming deductions.
