Invest in a greener future, enjoy lower taxes today
What's the story
In a time when being sustainable is not just an option but a responsibility, the Indian government offers a range of tax deductions and incentives to encourage eco-friendly living. This article details how you can take advantage of these benefits to make green choices that are not only good for the planet but also beneficial for your wallet.
Electric drive
Incentives for electric vehicle owners
The government of India provides a deduction under Section 80EEB, which enables taxpayers to claim up to ₹150,000 on the interest paid on loans for buying electric vehicles. By allowing people to save money on the interest paid on such loans, the government aims to encourage the adoption of electric vehicles by making them more financially accessible to the average consumer.
Eco-Home Advantage
Benefits on home loans for green homes
For individuals considering purchasing homes with sustainability certifications or green building tags, there are extra perks under Section 80EEA. Homebuyers can claim an additional deduction of up to ₹150,000 on interest paid on home loans for properties that fulfill specific energy efficiency standards. This is in addition to the standard ₹200,000 deduction already accessible under Section 24(b).
Solar savings
Solar energy investments pay off
Turns out, investing in solar panels isn't just good for the environment, it's also great for your wallet! Under Section 80IAA, individuals who install solar energy systems in their homes are eligible for deductions against the cost of equipment and installation. The government offers accelerated depreciation benefits, enabling you to recover a substantial portion of your investment within the first few years through tax savings.
Water wise
Enhanced deductions for water conservation efforts
Understanding that water conservation is a crucial aspect of sustainable living, some expenses incurred on rainwater harvesting systems and installation of water-efficient fixtures in residential houses are eligible for higher deductions. Although the applicable sections might differ (depending on state-specific rules and recent changes in tax laws), these initiatives nudge homeowners to adopt water-saving tech.
Green Goods Reward
Tax credits for sustainable lifestyle products
Finally, if you are buying eco-friendly products, such as biodegradable goods or products made from recycled materials, you can claim tax credits or deductions under several sections of the Income Tax Act as a taxpayer. Such incentives are designed to lower the carbon footprint by motivating consumers to opt for sustainable choices instead of traditional products.