Save On Tax When Buying An Electric Vehicle: Smart Strategies

Save On Tax When Buying An Electric Vehicle: Smart Strategies

The global popularity of electric vehicles (EVs) stems from a commitment to sustainable transportation, providing environmental benefits and potential tax savings. This guide explores strategies to maximise tax benefits when purchasing an electric car, covering both federal and state incentives. ** ##

Electric Vehicle

An electric vehicle is powered by a motor, drawing energy from a traction battery. Notably, electric vehicles incorporate regenerative braking systems, converting kinetic energy into electricity when brakes are applied.

Benefits Of Electric Cars

EV Ownership Presents Several Advantages:

1. Lower GST Rate: Governments incentivise EV adoption by reducing the Goods and Services Tax (GST) rate from 12% to 5%, making electric vehicles more accessible to consumers. **

2. Green Tax Exemption: Unlike traditional vehicles, which are subject to green tax upon RC renewal after 15 years, electric vehicle buyers are exempt from this fee, encouraging long-term ownership. **

3. Pollution Under Control (PUC) Exemption: EVs eliminate the need for Pollution Under Control certificates, as they produce no hazardous gas emissions. This exemption streamlines the ownership experience.

4. Insurance For Electric Vehicles: Many insurance companies offer electric car insurance coverage tailored to electric cars, protecting against damages from collisions and third-party incidents. Additionally, third-party insurance, mandatory for all vehicles, extends to EVs.

5. Electric Vehicle Section 80EEB

To further incentivise EV ownership, the Indian government introduced Section 80EEB in 2019, facilitating tax deductions related to electric vehicles. This section allows individuals to deduct the interest paid on loans to purchase electric cars from their taxable income. **

Understanding Section 80EEB Deduction Claims

Navigating The Tax Benefits Under Section 80EEB Involves Specific Criteria:

● Loan Purpose: To qualify for the deduction, the loan must be expressly for purchasing an electric vehicle.

● Financial Institutions: Individuals can choose any financial institution or non-banking financial company to obtain Taxpayers. Only individual taxpayers can avail of these benefits, excluding Hindu undivided families, corporations, partnership firms, or associations of individuals. **

● Limit On Deductions: The tax benefits are limited to the interest amount on the loan, with a cap set at Rs 1,50,000. **

Importance Of Electric Vehicle Insurance In India

Specialised insurance becomes crucial with the rising popularity of electric vehicles in India. Electric vehicle insurance addresses the unique needs of EVs, offering financial protection against high repair costs associated with advanced components.

This electric vehicle insurance covers risks rarely included in standard policies, such as explosions, fires, and battery damage. Some policies may extend to charging equipment, with additional benefits like battery replacement coverage and concessions on home charging stations. If you ride an electric bike, don’t forget to secure it with the ideal electric bike insurance. Claims are subject to terms and conditions set forth under the motor insurance policy. *

The benefits of buying electric cars in India include lower GST rates, green tax exemptions, reduced maintenance costs, and potential tax savings through Section 80EEB deductions, making them an environmentally friendly and financially attractive choice. **

Investing in an electric car brings environmental benefits and significant tax savings. Awareness of incentives reduces ownership costs, and staying informed ensures a smooth process, allowing immediate savings and a positive environmental impact. ** ##

*Standard T&C Apply

**Tax benefits are subject to change in prevalent tax laws.

##All savings are provided by the insurer as per the IRDAI-approved insurance plan.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.