EV Car Tax Benefit 80EEB in India – Save ₹1.5 Lakh on Your EV Loan

EV Car Tax Benefit 80EEB in India – What It Really Means for You

If you’re planning to buy an electric car this year, here’s a piece of good news that might just make your wallet a little happier. The EV car tax benefit 80EEB in India allows you to save up to ₹1.5 lakh in taxes — yes, real money, not government jargon — when you finance your EV through a loan.

To be fair, most people think only about range or charging stations when talking about EVs. But interestingly, there’s this hidden perk sitting in the Income Tax Act that can actually make your monthly EMIs feel lighter. Let’s unpack how it works and whether you still qualify in 2025.

What Is Section 80EEB?

In simple words, Section 80EEB is a special deduction under the Income Tax Act introduced to encourage electric vehicle adoption.

It lets individual taxpayers claim a deduction of up to ₹1.5 lakh per financial year on the interest portion of their EV loan. That means if you paid ₹1.4 lakh in interest during the year, your taxable income goes down by the same amount.

Now, depending on your tax slab, that could translate to savings of ₹30,000–₹45,000 every year. Not bad for driving something that doesn’t guzzle petrol, right?

Who Can Claim the EV Car Tax Benefit 80EEB in India?

This part is crucial. The benefit isn’t open to everyone.

✅ You must be an individual taxpayer — not a company or HUF.
✅ The loan should be taken from a bank or NBFC, not from your employer or a friend.
✅ The loan must have been sanctioned between 1 April 2019 and 31 March 2023.
✅ You need to be under the old tax regime, since deductions like this aren’t available under the new one.
✅ The vehicle must be fully electric — not a hybrid, not second-hand, and registered in your name.

If all those boxes tick green, congratulations — you’re eligible to claim the deduction.

How Much Can You Actually Save?

Here’s a quick example.

Let’s say you bought a Tata Nexon EV in 2022, took a loan of ₹12 lakh, and paid about ₹1.3 lakh in interest this year. You can claim that ₹1.3 lakh under Section 80EEB.

If you’re in the 30% slab, that’s roughly ₹39,000 in tax saved for the year. Multiply that by a few years, and you’ve saved over ₹1 lakh — all while reducing your carbon footprint.

That’s the power of the EV car tax benefit 80EEB in India — small numbers adding up to something meaningful.

80EEB Deduction for How Many Years?

There’s no fixed “number of years” limit in Section 80EEB. You can claim it each year until your EV loan interest is paid off — provided your loan was sanctioned before the 31 March 2023 deadline and you continue under the old tax regime.

So, if your loan runs for five years, you could claim the deduction every year, up to ₹1.5 lakh each time.

Is Section 80EEB Still Applicable in 2025?

This one causes a bit of confusion. Technically, yes — Section 80EEB still applies in 2025 for loans sanctioned before March 2023.

If your EV loan was approved in 2022 and you’re still paying EMIs, you can continue to claim the deduction in FY 2024-25 (AY 2025-26).

However, if you’re planning to take a new EV loan in 2025, there’s no official extension yet. That’s why people keep searching for “Section 80EEB extension” — and so far, it hasn’t been announced.

Electric Vehicle Tax Benefit India 2025 – Why It Still Matters

Even if new loans may not qualify for 80EEB, the idea behind it continues to shape India’s EV journey. The government’s message is clear: if you choose electric, we’ll help you save.

Beyond 80EEB, several states already offer their own incentives — like road-tax exemptions or registration fee waivers — and the GST on EVs remains just 5%. When you combine those with lower running costs, the electric vehicle tax benefit India story becomes even stronger.

To be fair, most buyers don’t make purchase decisions purely for tax breaks. But when a cleaner, quieter ride also saves you a few thousand every month, it’s a sweet bonus.

Example You Can Relate To

Imagine you’re comparing two cars: one petrol and one electric.

• The petrol car costs ₹10 lakh, the EV costs ₹13 lakh.
• But with 80EEB, you claim ₹1.5 lakh deduction on the EV loan interest.
• Over five years, you save roughly ₹45,000 per year in taxes plus at least ₹60,000 per year in fuel.

Suddenly, that “expensive” EV doesn’t look so pricey anymore, does it?

Try the EV Loan EMI Calculator

Curious to know what your monthly EMI and interest might look like before claiming the deduction? You can easily check it using our EV Loan EMI Calculator.

It helps you estimate your total loan cost, monthly payments, and interest — so you’ll know exactly how much of it can qualify under the EV car tax benefit 80EEB in India.

How to Claim the EV Car Tax Benefit 80EEB in India

1. Get the interest certificate from your bank or NBFC showing how much interest you paid during the year.
2. Keep the loan sanction letter that shows when the loan was approved.
3. While filing your ITR (under the old regime), claim the deduction under Section 80EEB.
4. Maintain all documents — the tax department may ask for proof.

That’s it. It’s not rocket science, just a bit of paperwork that can save you tens of thousands.

Common Mistakes People Make

• Opting for the new tax regime thinking it’s simpler, and losing the deduction.
• Buying a hybrid car and assuming it qualifies — it doesn’t.
• Taking a personal loan instead of an EV loan from an approved lender.

If you avoid these, claiming the EV car tax benefit 80EEB in India is fairly straightforward.

FAQs

Final Thoughts

Let’s be honest — buying an electric car still feels like a big leap for many Indians. Charging stations, battery life, resale value — there’s always a “but.”

Yet, when you combine the EV car tax benefit 80EEB in India, state-level subsidies, and low running costs, the math starts to make sense. You’re not just doing something good for the planet — you’re doing something smart for your finances too.

To be fair, government incentives may evolve, and 80EEB might get replaced or extended someday. But right now, it remains one of the most practical ways to make your EV dream a little more affordable.

So if you already have an eligible loan — claim that benefit proudly. You’ve earned it, both as a taxpayer and as someone driving India’s clean-mobility future forward.