As per Finance (No. 2) Act, 2019, an amount of up to ₹1,50,000 can be claimed as deduction for the interest paid on the loan taken for purchase of electric vehicles under Section ______ of the Income Tax Act.

Question

Question

This question was previously asked in

SSC GD 2 Dec 2021 Shift 3 (Official Paper)

Answer 1

The correct answer is 80EEB.

Key Points

The Income Tax Act of 1961's Section 80EEB focuses on the interest payments made on loans taken out to purchase an electric vehicle for personal or professional use.
Both two-wheelers and four-wheelers can use it.
One can avail Section 80EEB deduction until the repayment of the loan.
A deduction of up to 1,50,000 is permitted under Section 80EEB.
One can purchase an electric car for your own usage or for use in your business as an assessee.
In case, a person has purchased an EV on loan for business purposes and the interest amount exceeds ₹1,50,000, then the person can include the excess amount under business expenses.
To do this, though, one needs to make sure that the company name or the owner of the firm is included on the vehicle's registration.

Additional Information

80DDB:
- Individuals and Hindu Undivided Families are eligible for tax deductions for medical expenses related to a certain condition under Section 80DDB
80GG:
- Section 80GG of the Income Tax Act provides deductions related to house rent based on certain conditions
80DD:
- Deduction under Section 80DD of the income tax act is allowed to Resident Individuals or HUFs for a dependant-who is differently-abled and– is wholly dependent on the individual (or HUF) for support & maintenance.