Claim audit · FY 2026-27

“Section 80EEB provides a deduction of Rs 1.5 lakh on interest paid on an electric vehicle loan taken by an individual. This deduction remains available for all EV loans, including those sanctioned after 31 March 2023.”

Section 80EEB was introduced by the Finance Act, 2019 to promote electric vehicles. It allowed an individual taxpayer to claim a deduction of up to Rs 1.5 lakh on the interest paid on a loan taken from a financial institution for the purchase of an electric vehicle. The deduction was available only to individuals, not to HUFs or firms, and only for loans taken for an electric vehicle as defined under the relevant rules. Critically, the section carried a sunset clause: it applied only to loans sanctioned on or before 31 March 2023. This means that any EV loan sanctioned after 31 March 2023 is not eligible for the deduction. For loans sanctioned before the cutoff, the deduction remains available in the year in which interest is paid, subject to the Rs 1.5 lakh limit. The principal repayment is not deductible under this section. The deduction is in addition to the Section 80C ceiling, so it does not consume the Rs 1.5 lakh limit. However, a taxpayer cannot claim the same interest under another provision. The section is not available in the new tax regime under Section 115BAC. A taxpayer who opted for the new regime cannot claim 80EEB, even if the loan was sanctioned before the cutoff. The viral claim that 80EEB remains available for all EV loans is therefore stale. It was true for loans sanctioned up to 31 March 2023, but it is no longer available for new EV purchases financed after that date. Prospective EV buyers should not factor in the 80EEB deduction for loans sanctioned in FY 2026-27. Existing borrowers with pre-cutoff loans can still claim the benefit for the remaining interest payments. The deduction requires the borrower to obtain an interest certificate from the lender and to file the return under the old regime. The sunset design means the section is effectively dead for new borrowers but not for those who acted before the deadline.