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Electric vehicle Loan Income Tax Benefit – Section 80EEB

Shitanshu Kapadia
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Electric vehicle Loan Income Tax Benefit – Section 80EEB

The popularity of Electric Vehicle (EV) is growing. The electric vehicle is seen as a replacement for traditional petrol-based vehicles.

The prime reason is electrical vehicle addresses the rising issue of pollution and global warming. Additionally, it also addresses the issue of depleting natural resource petrol (fossil fuel). As we know that petrol is a finite resource and the price of petrol is growing almost every day. The cost of running EV is low compared to a petrol-based vehicle.

The government of India is promoting electrical vehicles heavily. A special income tax benefit under section 80EEB is announced by the government for EVs.

The new income tax section 80EEB allows a deduction for the interest paid on the loan taken for the purchase of EV. This section is applicable from AY 2020-21. In this post, I will share information about – What is electric vehicle? Which Electric Vehicles are available in India? Electrical Vehicle Loan and Income tax benefit for the Electrical vehicles.

Electric vehicle section 80eeb

What is Electrical Vehicle?

Electrical vehicles make use of electrical energy generated from the battery. There are two types of electric vehicle (1) Battery Electric vehicle (2) Plug-in Hybrid Electric Vehicle. Battery electric vehicle are pure electrical vehicle which make use of electrical motor. On the other hand, Hybrid vehicle are convertible and it offers mixture of battery and petrol.

Which EVs are available in India?

Following electric car and e-bikes available in India.

  • Hyundai Kona Electric
  • Mahindra e-Verito
  • Mahindra e2o
  • Tata Nexon EV 2020
  • TVS iQube
  • Hero Electric Photon 48V
  • Bajaj Chetak

Loan for Electric Vehicles

State Bank of India offers India’s first green car loan. It is known as green car loan for electric cars. The loan is offered in the age range of 21 years to 67 years. The repayment period of this loan is 3 years. The rate of interest for this loan is fixed which is 20 BPs lower compared to normal car loan interest rate. You can get loan up to 90% of vehicle value. The eligibility of loan amount is based on your income.

Income Tax Section 80EEB

  • The deduction under section 80EEB is provided only to the individual tax payers. This deduction is not provided to HUF, AOP, partnership firm or any other type of tax payers.
  • The deduction is provided only for interest payment. The maximum cap on the amount is Rs.150000. The electric vehicle can be purchased for personal usage or business usage.
  • In case of personal usage, you can claim interest payment up to Rs.150000. If car is used for business purpose any interest payment above Rs.150000 can be claimed as business expenses. In order to claim business expense, the car should be registered in the name of the owner or the business enterprise.
  • You require interest paid certificate at the time of filing income tax return. You need to take a loan from bank or financial institute to buy electric vehicle.
  • The loan must be sanctioned during the time period starting from 1 April 2019 till 31 March 2023.
  • The benefit is offered to 3 wheelers, 4 wheelers and electric 2 wheelers.

FAQ

#1 Who is eligible to get benefit under section 80EEB?

An individual who has taken loan for buying an Electrical vehicle from financial institution is eligible to claim benefit under section 80EEB.

#2 What is the amount of deduction that is eligible under section 80EEB?

Interest payment subject to maximum Rs.150000 is eligible for income tax benefit under section 80EEB.

#3 What is time period to enjoy this benefit?

The benefit of deduction under this section is available from AY 2020-21 till the repayment of loan continues.

#4 What evidence are required in order to get benefit under section 80EEB?

You need to provide interest certificate issued by bank or financial institution while filing income tax returns.

11 Mistakes to Avoid while buying property

Shitanshu Kapadia
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11 Mistakes to Avoid while buying property

Buying a property is one of the most complicated and biggest decisions of a lifetime.

From title clearance to black money to home loan there are many complications involved in this financial transaction.  As the financial transaction amount is bigger you need to be careful while buying a property. A single mistake can invite a lot of trouble for you and your family.

Let me share one real story with you. My friend has recently done a real estate deal where he got flat at lucrative rates. He made payment in black without looking at the title clearance report. Later he realized that title of the flat was not clear and he got a lot of issues in getting a home loan.

The lesson learned from the above incident is one should carry out proper research and avoid common mistakes while buying a property.

Here is a list of mistakes that you should avoid while buying a property.

buying property

11 Mistakes to Avoid while buying property

#1 Not Calculating actual cost of property

The first and most common mistake people do while buying a property is not calculating the actual cost of the property. In addition to the money paid to the seller, you need to make provision for additional money such as –

  • Stamp duty payment
  • Legal fees payment to advocate
  • Society transfer fees
  • Advance maintenance deposit
  • Insurance cost of property
  • Brokerage Cost

You should consider all hidden costs mentioned above while buying a property.

#2 Buying a property before checking property record

You need to check the property record before doing a property deal. Real estate is a non-transparent sector. A lot of black money is involved in real estate. Maximum frauds take place in real estate deals. You have to be careful and check property records before involving yourself in the property transaction.

Checking property records for land and flat is very easy. You can check property records online. Here is a step by step method to check property and land records online with a click of a button.

#3 Not doing due diligence about title of property and valuation

You should carry out due diligence before buying a property. The due diligence process should involve verification of title of property and valuation. Instead of performing this task by yourself, you should appoint an advocate that helps you in doing proper title verification. You should check at least the past 20-30 years’ records.

#4 Not comparing with other properties

You should compare various properties before buying property. The comparison should not be done only on the basis of the cost. You should compare other factors such as location of property, amenities offered, future prospects, availability of home loan etc.

#5 Not taking help from real estate agent

If you are buying property for the first time, you should take the services of an experienced real estate agent. The real estate agent helps you in doing negotiation, handling the legal matter and doing transactions. The experience real estate agents have a good experience and they can help you in relieving stress during a property transaction.

#6 Buying a property beyond your limit

Another biggest mistake while buying property is buying a property beyond your limit. There are many buyers who commit this mistake and get into trouble at later stage. The property transaction leaves them without any disposable income. Most of them are unable to deal with monthly EMI and other maintenance costs of the property. You should calculate maximum limit that you can afford and stick to it.

#7 Not opting for Home Loan

You should go for a home loan while buying a property. A home loan gives you multiple benefits. You can get finance and a lower interest rate. The home loan also provides you income tax benefits on the EMI paid. Looking at the current rate of interest it is advisable to opt for a home loan.

#8 Not planning for black money

In India, most of the real estate transactions take place with a combination of white and black money. The black money component varies from seller to seller. You have to plan how you are going to arrange for black money while doing a transaction.

#9 Avoiding Inspection of property

You should appoint an expert inspection agency before buying the property. The agency should carry out an inspection of the property. This is to avoid trouble at a later stage. This may cost you additional money.

#10 Not considering future appreciation of property

It is recommended to consider the future appreciation of the property. It is not matter of calculation but it is one type of prediction. Whenever you are buying a property for investment, you should consider future returns.

#11 Not considering expense post purchase of property

You need to also consider expenses that you are likely to incur post-purchase of property. Most of the property buyer does not consider it. The expenses post buying property are furniture cost, cost of interior decoration, modification/improvement cost & cost of Vastu Shanti or Gruh Pravesh puja.

Best Performing Mutual Funds for Investment 2021

Shitanshu Kapadia
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0
Best Performing Mutual Funds for Investment 2021

Which are best performing mutual funds for Investment in 2021? Did you type this question on the search engine? Or are you looking for answer of this question? If yes, this post is for you. In this post, I will share Best Performing Mutual Funds for Investment in 2021.

How to shortlist Best Performing Mutual Funds?

The list of best performing mutual funds given below is not shortlisted based on the current performance of the scheme. The reason is the mutual fund that is performing well today does not guarantee that it will perform in the same manner or generate same return in the future.

This means you cannot shortlist fund based on the short term performance. You need to consider various things for finding best performing mutual funds. I have considered following things in order to shortlist best performing mutual funds.

#1 Performance Against Benchmark

The performance of fund against benchmark is extremely important. The benchmark is standard against which its performance of mutual fund is compared. As per mandate set by SEBI, fund houses to declare the benchmark index. The fund returns need to be compared with benchmark. If the selected mutual fund has delivered higher returns compared to benchmark, the fund has outperformed benchmark.

The comparison of fund with benchmark is done for the longer duration to find out outperforming mutual funds.

#2 Performance Against Category 

The second important thing to consider while selecting best performing fund is performance of fund compared to active peer group. It gives holistic picture of fund performance. The comparison should be done in the same category. This means you cannot compare return given by large cap fund with mid cap fund.

#3 Consistence Performance

The third important thing to consider is consistency in the performance. The fund should be generating good returns consistently. This include both bullish and bearish market period. It is advisable to consider last 5 years’ performance while making selection of best performing mutual funds.

Best Performing Mutual Funds for Investment 2021 

Large Cap Funds 2021 

#1 Axis Blue Chip Fund – Growth 

Axis Blue Chip Fund – Growth is first in the list of best performing fund for investment. This fund has given consistently two digit returns to the investors in past five years. This fund follows benchmark Nifty 50. This fund has consistently beat benchmark in last five years. This fund is also performing better compared to peer funds.

#2 Canara Rob Blue Chip Equity Fund – Growth

Canara Rob Blue Chip Equity Fund – Growth is next in the list of best performing fund for investment. This fund has CRISIL ranking 5. Last five years returns of this fund is very good. This fund follows benchmark S&P BSE 100. This fund has given very good returns compared to peer funds. 

Mid Cap Funds 2021 

#3 Axis Mid Cap Fund – Growth 

Axis Mid Cap Fund – Growth is first best performing mid cap mutual fund for investment. Axis Mid Cap Fund invests in large portion in mid cap stock. In addition to mid-cap this fund also invests in large cap and small cap stocks. This fund was able to beat BSE Mid Cap benchmark consistently in last five years. The past performance of this fund compared to peer is also good. 

#4 DSP Mid Cap Fund – Growth 

DSP Mid Cap Fund Growth is next in the list of best performing fund. DSP Mid Cap fund has generated very good returns for the investors in last five years. If you are planning to invest your money for 3-4 years you can invest in DSP Mid Cap Fund. The performance of this fund compared to peer is also good. 

Multi Cap Funds 2021 

#5 UTI Equity Fund – Growth 

UTI Equity Fund is truly multi cap fund which invest in large cap, mid cap and small cap stocks. This fund is giving consistently two digit returns to the investors in last five years. This fund follows Nifty 50. This fund has outperformed Nifty 50 benchmark and generated very good returns for the investors in last five years. 

#6 Canara Robeco Equity Diversified Fund – Growth 

Canara Robeco Equity Diversified Fund – Growth is CRISIL rank 5 fund. This fund has given very good performance in the past. This fund follows benchmark S&P BSE 500. Canara Robeco has outperform benchmark and given very good returns to the investors. This fund is suitable for long term wealth generation 3-5 years.

best performing mutual funds 2021

Final words

Selection of mutual fund for investment is task. You need to do lot of research while making a selection of mutual funds. You can make use of screener for doing research. Compare the fund with respect to various parameters.

Consider goals, risk, returns and asset allocation while making a selection of mutual funds. Before selecting a fund for investment consider evaluating performance based on various durations from 1 month to 5 years. This will help you to know consistency in performance for the longer duration. You may consider looking at rating of the fund while making a selection.

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