Section 132 — Electric Vehicle Loan Interest | ITA 2025

Section 132 — ELECTRIC VEHICLE LOAN INTEREST DEDUCTION (1961 s. 80EEB SUCCESSOR)

Section 132 is the substantive equivalent of 1961 s. 80EEB. Individual allowed deduction up to ₹ 1,50,000 per FY for INTEREST PAID on loan from financial institution for purchase of an ELECTRIC VEHICLE. Available for one-time / one-vehicle purchase; loan-sanction window (typically 1-Apr-2019 to 31-Mar-2023). Promotes EV adoption; aligns with India's clean-mobility / Net-Zero policy. Available ONLY in OLD regime.

Statutory text — Income-tax Act, 2025

Marginal note — Deduction in respect of purchase of electric vehicle

(1) An assessee, being an individual, shall be allowed a deduction of interest p ayable on loan taken by him from any financial institution for the purpose of purchase of an electric vehicle, as per the provisions of this section.

(2) The deduction under sub-section (1) shall be subject to the condition that the loan has been sanctioned by the financial institution during the period beginning on the 1st April, 2019 and ending on the 31st March, 2023.

(3) The deduction under sub-section (1) shall not exceed ` 150000 and shall be allowed in computing the total income of the individual for the tax year beginning on the 1st April, 2019 and subsequent tax years.

(4) Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other tax year.

(5) For the purposes of this section,—

(a) “electric vehicle” means a vehicle powered exclusively by an electric motor, whose traction energy is supplied exclusively by traction battery installed in the vehicle and has such electric regenerative braking system, which during braking provides for the conversion of vehicle kinetic energy into electrical energy;

(b) “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies, or any bank or banking insti- tution referred to in section 51 of that Act and includes a non-banking financial company.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 — s. 132	INCOME-TAX ACT, 1961 — s. 80EEB
EV loan interest deduction up to ₹ 1.5 lakh	1961 s. 80EEB(1)
Sanction window 1-Apr-2019 to 31-Mar-2023	1961 s. 80EEB(3)
EV per CG-prescribed definition	1961 s. 80EEB Expl.

PLANNING NOTES

(i) Verify loan-sanction-date eligibility (post-FA 2023 may have sunset; verify Rules). (ii) For business-use EV (cab / delivery / commercial), this is INDIVIDUAL deduction; companies may claim depreciation u/s 33 instead. (iii) EV definition typically per Ministry of Heavy Industries notification — verify product-eligibility with manufacturer. (iv) Loan from BANK or NBFC qualifies; loan from employer / family / individual lender does NOT.

CROSS-REFERENCES

Section 33 — Depreciation (alternative for business EVs).

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