Tax Benefits for Electric Cars in India 2023

Indian Government added an income tax deduction policy in the budget under 80EEB to promote the use of electric vehicles in India. The Government has made this policy for those people who want to buy an electric vehicle on loan. Moreover, those people can get a deduction on the amount of interest paid while repaying the loan as per this section. Furthermore, Rs 1,50,000 is the total amount of tax exemption allowed. This is the best Electric Vehicle subsidy tax Policy in India.

How to Calculate the Actual Deduction Amount Under 80eeb

If you have to buy an electric vehicle at Rs 15 Lakh on Loan, you have paid the total amount of Loan interest, which is 2 lakh. Moreover, the Total Tax amount is Rs 2 Lakh, and Your Rs 150,000 are deducted from under 80EEB Policy. Furthermore, Now you can pay only interest is Rs 50,000 Due to This policy.

Are Hybrid Cars Eligible for Tax Exemption?

There is no tax benefit for hybrid vehicles in India. In this budget, the Indian government does not discuss any tax exemption for hybrid cars. These cars may not be capable of this tax exemption because every hybrid car has a petrol and diesel engine. These cars are not electric vehicles.

Moreover, only pure electric vehicles are capable of this exemption. There is no any discuss of the FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles) India tax exemption scheme.

Electric Car Tax Benefits

  1. Under the FAME India scheme, electric cars are eligible for an incentive of up to Rs. 1.5 lakh for a four-wheeler and Rs. 50,000 for a two-wheeler.
  2. For Electric Vehicles GST rate was Reduced by 5% compared to 28% for petrol and diesel cars.
  3. Lower road tax and registration fees in some states, such as Delhi and Maharashtra.
  4. Exemption from the annual “green tax” levied on traditional vehicles.
  5. Some state governments also offer additional benefits, such as free parking and toll exemptions for electric vehicles.

Can 80EEB Tax Benefits Claimed Every Year?

NO, 80EEB tax benefits you can claim only once after buying a new electric vehicle. It is not written anywhere that you can claim your tax benefits more than once.

Income Tax Depreciation on Electric Vehicles

Income tax depreciation is the process by which the cost of an asset (e.g., car, truck, etc.) is spread over its useful life to reduce the present value of the asset’s cost. Another side is that most electric vehicles depreciate approximately 50% in 3 to 5 years. They have lost their 40 to 60% valuation after 4 to 6 years of purchase.

So various schemes have to provide Income tax depreciation on electric vehicles. EVs’ central costly part is the Battery pack. So after some years, electric vehicles need replacements of the battery pack. This battery pack is 50 to 60% of the car’s price.

My name is Gagandeep Singh, and I am the proud owner of this website. Moreover, with more than five years' hands-on experience in the electric vehicle industry (EV)

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