India Offers US $ 2,200 In tax incentive on electric car purchase
The Indian government has taken a concrete measure to boost sales of electric cars in the private sector. In its first financial budget announcement after a thumping win in the recent general elections, the Narendra Modi government has announced a slew of measures to promote sale of electric cars in the private segment.
Apart from direct benefit to buyers of electric cars the government also announced measures to support manufacturing of lithium-ion batteries for electric mobility.
Finance Minister announced that government will allow a tax deduction on loan taken by citizens to purchase electric cars. The tax deduction limit has been set at Rs 1,50,000 (US $ 2,200) without any relation to the class or cost of the electric car purchased. According to the government a buyer would be able to reap tax benefits of Rs 2,50,000 (US $ 3,650) over the entire tenure of the loan through this newly announced incentive.
Minister also informed that government has proposed to reduce the goods and services tax (GST) on electric vehicles from 12% to 5%.
To further promote the use of electric vehicles in the country, government also proposed to exempt certain parts of electric vehicles from customs duty. These parts include the e-drive assembly, on-board charger, e-compressor and charging devices.