I am a retired company executive, a senior citizen and IT assessee in the 30 per cent category. If I am going in for a vehicle purchase financed through a bank loan, am I eligible for any sort of IT exemption, namely by claiming depreciation benefits or for the loan interest I am paying or any exemption of any sort?

Roy Markose

Basis the facts shared, we understand that you are a retired personnel. If the motor car is purchased by you for business purposes, the car loan interest can be listed as business expenditure while filing the income tax return. You can also claim tax benefits in the form of depreciation upon showing your car as an asset used in the carrying on of a business activity.

On the other hand, a salaried individual cannot get tax benefits on car loans. As stated above, business owners and self-employed individuals can get those benefits and exemptions if such car is used for business and commercial purposes.

Further, as per the provisions of Section 80EEB of the Act, a deduction up to ₹1.5 lakh can be claimed towards interest paid on any loan availed, provided the following conditions are satisfied:

• Loan is taken by individual from any financial institution for the purpose of purchase of an electric vehicle

• Loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019, and ending on the 31st day of March, 2023 .

The writer is a Partner with BDO India LLP 

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