Deductions u/s 80EEB

8 Nov 2022

SEC 80EEB

                 (Deduction in respect of interest payable on loan taken for purchase of Electric Vehicle)

 

 

1.       Eligible Assesses: The loan taken by an individual for purchase of an electric vehicle from any financial institution. The interest paid on such loan would qualify as deduction under this section.

 

 

2.       Condition: There are four conditions which have to be satisfied to claim such deduction. The conditions are as follows:

 

1.       Period of benefit: The Benefit of this section can be availed from assessment year 2020-2021 and will be available in the subsequent year till the repayment of loan.

 

2.       Maximum eligible amount: Interest payable, subject to maximum of Rs. 1, 50,000.00.

 

3.       No deduction under any other provision:  The interest allowed as deduction under section 80EEB will not be allowed as deduction under any other provision of the Act for the same or any other assessment year.

 

Note:  Some Important term used are defined as follows

                 Let’s understand this with the help of an example:


         Case 1- Mr. Amar a salaried employee took a loan of Rs.20 lakh for purchasing an electric car on the date (01.04.2022). The loan was taken from State Bank of India with a rate of interest 11% p.a.

         Case 2- Mr Akbar a salaried employee took a loan of Rs.14 lakh for purchasing an electric car on the date (31.07.2021). The loan was taken from a NBFC with a rate of interest 10% p.a.

         Case 3- Mr Anthony a salaried employee took a loan of Rs.25 lakh for purchasing an electric car on the date (10.10.2022). The loan was taken from a NBFC (not deposit taking, or fulfilling other criteria) with a rate of interest 11% p.a.

         Case 4- Mr. Singh a salaried employee took a loan of Rs.20 lakh for purchasing an electric car on the date (01.03.2019). The loan was taken from State Bank of India with a rate of interest 11% p.a.

 

Compute the amount of deduction, if any, allowable under the provisions of the Income-tax Act, 1961 for A.Y.2023-24 in the hands of Mr. Amar, Mr. Akbar, Mr. Anthony and Mr. Singh. Assume that there has been no principal repayment in respect of any of the above loans up to 31.3.2022.

Solution:





Abhijit Das