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Tax Rebates on buying Electric Cars in India. Road Tax, GST, Income Tax

Tax Rebates on buying Electric Cars in India. Road Tax, GST, Income Tax

Here are all Tax Rebates which you can get on buying Electric Car in India including Income Tax, Road Tax, GST, Fame Incentive and other benefits on EV Cars

 

Tax Rebates on Buying EV Cars (Electric Vehicles)

Electric Vehicles would be what future of Mobility Solution and Government is putting all steps to ensure EV turns out to be success by offering several Benefits across in Tax Concessions on buying EV Cars.

Here is what all Rebates and Concessions can get on buying Electric Cars in India

 

GST Rebate on Buying EV Car

GST is applied at Concessional Rate on buying EV Car in India. You will be surprised with Tax Rates on EV as against Petrol and Diesel Cars

Segment GST on EV GST on Petrol/Diesel/CNG Cars
Sub 4 Meter Petrol & CNG Cars with Engine < 1.2 Litre 5% 28% GST + 1% Cess
Sub 4 Meter Diesel Cars with Engine < 1.5 Litre 5% 28% GST + 3% Cess
> 4 Meter Cars 5% 28% GST + 17% Cess
SUV Cars > 4 Meter with Laden GC > 170 mm 5% 28% GST + 22% Cess

 

Road Tax Waiver on EV Cars

MG Zs photo

Several States Offering 100% Waiver in terms of Road Tax on Electric Cars in India. Notably,

  • Delhi
  • Maharashtra
  • Karnataka
  • Rajasthan
  • Goa
  • Tamil Nadu

offering 100% Waiver on Road Tax, while some states offering concessional rates of Road Tax

  • Madhya Pradesh - just 4%
  • Kerala - just 5%

 

Income Tax Benefits on EV Cars

Under Section 80 EEB of Income Tax Act, any person buying Electric Car on Loan will be allowed to claim Interest Payment Deduction of upto Rs 1.5 Lakh in Income Tax

So, for instance if you buying EV through loan from SBI then for loan of Rs 12.5 Lakh for 3 Years, which comes to around Rs 1.5 Lakh - you can claim entire interest paid as deduction in Income Tax

Essentially, if your Income Tax Slab say is 30% thus you can save in Rs 45,000 of Income Tax by showing interest paid towards buying EV Cars 

 

Concessional Interest Rates on Green Cars

Banks too are offering concessional Interest rates on Green Cars with 20 bps interest rate reduction. Same been offered by SBI Car Loan and even followed by some PSU Banks to offer concessional rates on EV Cars and loan will be done at .2% lower rate as against Petrol & Diesel Cars

 

Delhi Government Subsidy on EV Cars

Delhi Government is also offering an exclusive Purchase Incentive of Rs 10,000 per Kwh of battery capacity per electric 4 Wheeler (subject to maximum of incentive of Rs 1.5 Lakh) to the registered owners of first 1000 e-cars to be registered in Delhi as per Notification under Delhi Electric Vehicle Policy which came on 7th August 2020

To be noted that  over 750 EV Cars are been registered in Delhi since August 2020 as per unofficial update, and for consumer considering EV and in Delhi - its a last call to buy on EV Cars on earliest basis to enjoy Rs 1.5 Lakh incentive.

 

FAME Benefits on EV Cars

FAME is Faster Adoption of Manufacturing Hybrid and Electric Vehicle, which is what introduced by Government to incentivise buyers going in for EV Cars

FAME Scheme earlier in Phase 1 was offering incentive to consumers from Government directly to all buyers buying EV, but now FAME2 scheme is what introduced where Rs 1.5 Lakh Incentive is what offered to Buyers in Commercial Segment going in for EV Cars which are priced under 15 Lakh

Objective is to promote affordable EV Cars and also generate interest among Commercial Buyers to switch to EV Vehicles.

 

Existing EV Cars and Upcoming EV Cars for 2021

Needless to mention - Government is doing all steps to ensure EV turns out to be a big success. But in 2020 we have just 4 EV Cars in India in Mass Market essentially as

New Cars

Check Prices with Complete Features

Make
Model
  • Mahindra eKUV100
  • Tata Nexon EV
  • MG Zs EV
  • Hyundai Kona EV

But in 2021 - we are expecting few more models to be introduced in as

  • Tata Altroz EV
  • Mahindra eXUV300
  • Maruti Wagon R EV

which will what extend the market to next level in terms of Electric Cars

 

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Thursday, 25 February 2021

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