- GST on EVs slashed to 5 per cent from 12 per cent
- Rs 1.5 lakhs income tax deduction on purchase of EV
The Indian government has decided to reduce the GST on electric two-wheelers from 12 per cent to 5 per cent. The decision was announced at the 2019 Budget by Finance Minister Nirmala Sitharaman.
The government has already moved GST council to lower the GST rate of the electric vehicles. This move is definitely going to make electric two-wheelers and electric cars more affordable. Along with this, the government has also provided with an additional income tax deduction of Rs 1.5 lakhs on the interest paid on the loans taken to purchase EVs. The Finance Minister announced that the citizens of the country will receive an overall benefit worth ₹2.5 lakh on buying EVs. This benefit includes the aforementioned discount on the loan along with other tax benefits offered over the loan tenure.
Through this budget, the government has sent clear indication to the automobile manufacturers about its intention to support clean vehicles. In fact, the government has also announced an increase of excise duty by Rs 1 per litre for petrol as well as diesel vehicles.
