Section 80EEB — EV Loan Tax

How the 80EEB deduction works

Introduced in Budget 2019 to push EV adoption, Section 80EEB allows a deduction of up to ₹1,50,000 per financial year on the interest paid on a loan taken to buy an electric vehicle (two-wheeler or four-wheeler, personal or commercial). The loan must have been sanctioned between 1 April 2019 and 31 March 2023 by a bank or NBFC. The deduction is available only under the old tax regime — the new regime explicitly excludes it.

Worked example

You bought a Tata Nexon EV in March 2023 with a ₹12 lakh loan at 9.5% over 5 years. Year-1 interest is roughly ₹1.05 lakh, well within the ₹1.5L cap — fully deductible. If you're in the 30% slab under the old regime, that's a tax saving of ₹31,500 + cess. Across the 5-year loan, total interest of around ₹3.1 lakh translates to ~₹95k in tax savings. The benefit continues every year until the loan is fully repaid, subject to the ₹1.5L annual cap.

When to use this

• You took an EV loan during the eligible window (Apr 2019 – Mar 2023)
• You file under the old tax regime — new regime ignores 80EEB
• You haven't claimed depreciation on the EV under business use (mutually exclusive)
• The EV is registered in your name, not a family member's

80EEB stacks on top of Section 80C (₹1.5L), 80D health insurance, and home loan benefits — meaningful for high-income old-regime filers. Read our companion EV vs petrol running cost guide and the full background in section 80EEB EV loan deduction.