In a bid to drive electric-vehicle adoption in India, government has proposed income tax benefits to EV buyers.
The benefits are as follows:
1. Income tax sop: The government has proposed tax deduction of Rs 1.5 lakh on the interest paid while purchasing electric vehicles. this initiative would lead to a benefit of around Rs 2.5 lakhs for a customer during the entire duration of the loan.
These benefits will aim to leapfrog and envision India as a global hub of manufacturing EVs. which will in turn boost economic growth by inviting large corporations to set up manufacturing units in advanced technology areas including lithium storage batteries and solar-charging infrastructure.
2. Cut in GST rate for EVs: the government has also moved the Goods and Services Tax (GST) council to lower the tax rate on such vehicles by 7%.
3. Duty exemption: The customs duty is also being exempted on certain parts of EVs to further incentivise e-mobility in the country
.While the tax incentives could generate greater interest in EVs, the local manufacture of lithium-ion batteries would be a big step in bringing down the high purchase price, one of many impediments to electric-vehicle adoption. EV Charging availability, too, remains a concern for buyers who are open to the idea of going electric.
The carmakers have the plans to bring out their own EVs; with Hyundai to launch the Kona, Maruti is also developing an electric Wagon R, electric KUV100 by Mahindra and Tata ready with its Tigor EV.