Section 80EEB: Features, Benefits, Eligibility & Conditions | 5paisa (2024)

What Is Section 80EEB?

You can claim tax savings of up to Rs 1.5 lakh on interest paid on loan taken out particularly to buy electric automobile under Section 80EEB of Income Tax Act. To claim 80EEB deduction, however, few limitations & requirements pertaining to loan provider & electric car must be adhered to.
Benefits from tax deductions are only available if loan is approved between January 1, 2019, & March 31, 2023.

What Are Key Features Of Section 80EEB?

1. Qualifications

This section's deduction is only available to people who want to pay taxes under previous tax system. Other taxpayers are not eligible for this deduction. Therefore, you are not eligible to receive any benefits under this provision if you are HUF, AOP, partnership firm, company, or any other type of taxpayer.

2. Amount Subtracted

Under Section 80EEB, interest payments up to Rs 1,50,000 are deductible. taxpayer may own electric car for either personal or professional purposes. This deduction would make it easier for people who own electric cars for personal usage to write off interest they pay on their loans.

Under section 80EEB, individual may additionally deduct up to Rs 1,50,000 for business use. Interest payments over Rs. 1,50,000 may be deducted from your company expenses. car must be registered in owner's or company enterprise's name in order to be claimed as business cost.

It should be noted that while submitting return, individual taxpayer should receive interest-paid certificate & have required paperwork on hand, including loan documentation & tax invoices.

Benefits Of 80EEB Deduction

• loan must have been selected through bank or specified NBFC.
• loan must be approved by March 31, 2023, & April 1, 2019.
• deduction in this area can only be made by individual.
• maximum amount deducted would be Rs. 1.5 lakhs.
• easier in terms of buying electric cars.
• Road tax is not applicable to electric vehicles, & registration costs are lower in some states, such as Delhi.
• There won't be any emissions when there's no fuel because combustion engine is older & has more moving parts, which means it will wear out more quickly than electric motor. It will also require less maintenance. There are fewer than 20 working parts in electric motor.
• Low GST: Previously assessed at rate of 12%, current rate is only 5%.
• There will be charge & personal car exemption from green tax when RC is renewed after 15 years. Electric vehicle owners will not be required to pay green tax.
  

Eligibility Criteria Of Section 80EEB Of Income Tax Act

This section's deduction is only available to people who want to pay taxes under previous tax system. Other taxpayers are not eligible for this deduction. Therefore, you are not eligible to receive any benefits under this provision if you are HUF, AOP, partnership firm, company, or any other type of taxpayer.

What Is Amount Of Deduction Available For Section 80EEB?

You can deduct interest payments up to ₹1,50,000 under Section 80 EEB. individual taxpayer is permitted to own electric vehicle for business or personal use. Deduction of interest paid on loans would be made easier for those who buy electric cars for personal use.

A person may also deduct under section 80 EEB up to ₹1,50,000 for business purposes. Interest payments over ₹1,50,000 could be deducted from company's expenses. For automobile to be claimed as business expense, it must be registered in owner's name or name of firm.

Please be aware that individual taxpayer must obtain interest paid certificate & keep all necessary documents, such as loan documentation & tax invoice, close to hand while filing return.

What Are Conditions To Claim Deduction Section 80EEB?

• loan must be taken out between April 1, 2019, & March 31, 2023, which is fiscal year.
• It is best to use loan to purchase electric car.
• No other part will allow interest that is permitted under 80 EEB to be offered.
  

Conclusion

Under Section 80EEB of Income Tax Act, affordable housing offers significant tax benefits for home buyers. First-time home buyers can particularly benefit from home loan interest deduction & mortgage interest deduction. Additionally, interest subvention scheme supports housing finance by reducing borrowing costs. Understanding real estate taxation is crucial for maximizing these