Buying a commercial vehicle is not just about growing your business. It can also bring major tax benefits if you use it wisely. Whether you are a small business owner, a fleet manager, or a self-employed professional, understanding how to use tax rules properly can save you a lot of money. In this article, we explain how you can optimize your expenses and make the most of your commercial vehicle purchase.

How Commercial Vehicles Offer Tax Benefits

When you purchase a commercial vehicle, it is considered a business asset. This means you can claim several tax deductions under Indian tax laws. Here are the main benefits:

Depreciation: Commercial vehicles lose value over time. Under the Income Tax Act, you are allowed to claim depreciation on your commercial vehicle. The current depreciation rate is 30% for most commercial vehicles, which reduces your taxable income year after year.
Interest on Loan: If you have taken a loan to buy a commercial vehicle, the interest paid on the loan can be claimed as a business expense. This helps you lower your total tax liability.
Fuel and Maintenance Costs: Expenses like fuel, servicing, repairs, and insurance related to the commercial vehicle are allowed as deductions if the vehicle is used for business purposes.
GST Benefits: If you are registered under GST and the commercial vehicle is used only for business, you may also be eligible to claim input tax credit on the GST paid during purchase.