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.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 80EEB.
- The Government of India wants to promote the use of electric vehicles in India and to do so, they have added a new section for Income Tax Deduction, 80EEB.
- Under this section, if someone purchases an electric vehicle using a loan, they can get deductions on the interest amount while paying off the loan back.
- The total amount of tax exemption allowed is ₹1,50,000.
- A new Section 80EEB has been introduced allowing a deduction for interest paid on loan taken for the purchase of electric vehicles from the AY 2020-21.