Still paying off your EV loan? You can claim ₹1.5 lakh tax benefit every year

For EV buyers with older loans, this is still a smart way to save tax.

If you had taken a loan from a bank or an NBFC to buy an electric vehicle between April 1, 2019, and March 31, 2023, you can claim a tax deduction under Section 80EEB. You can deduct a maximum of ₹1.5 lakh in a year on the interest paid, and this continues as long as the loan remains—even in FY 2025-26. But only individuals, not partnerships and companies, are covered.

Who is qualified and what type of loans are covered

This is admissible only to those who availed a fresh loan for a fresh electric vehicle—a car or a two-wheeler. The EV has to be in your name. Second-hand vehicles, loans from family or personal financiers, or loans availed for a corporate vehicle do not qualify. Your bank has to issue an interest certificate per financial year to avail of the deduction.

How to claim this tax relief on your ITR

You can claim either up to ₹1.5 lakh or actual interest paid—whichever is lower of the two—per financial year. This concession is only on interest, not principal. If your electric vehicle is for business purposes, you may also claim additional interest under business expense provisions, but that's a different provision from Section 80EEB. Make sure you use the right section while filing your ITR so as not to mislead or reject the application.

This benefit is allowed only in the old regime

You are not eligible to claim this deduction under the new tax regime. In order to claim this tax relief, you must opt for the old tax regime while filing your return. This may mean paying higher slab rates, so compare the two regimes first. But if your interest outgo is substantial, the Section 80EEB deduction can make the old regime viable.

What documents you need to submit

Keep a copy of your loan sanction letter dated, interest certificate for the relevant financial year, invoice and registration certificate of the vehicle, and details of the loan account. The new ITR forms have special columns for Section 80EEB, where you can state the loan account number and registration number—do remember to fill these in properly.

Why this deduction remains useful in 2025

Even though no new loans qualify now, you can still benefit from this tax savings if you borrowed money before March 2023 until you pay the loan. During the initial part of your loan, interest is frequently considerable—this is a huge write-off. As time passes, even fairly small interest payments place you under radar. For EV buyers with older loans, this is still a smart way to save tax.