Harried with the turbulent rise in oil prices, NPowersU thought it fit to introduce to its readers a benefit contained in an Income-tax provision under the Income-tax Act, 1961.
In order to meet its commitments under the Paris Climate Accords, the Centre has taken initiatives to promote the use of electric vehicles and has pushed state governments to incentivize the purchase of electric vehicles.
Cars for personal use are considered luxury products under Indian tax laws. Therefore citizens do not receive any tax benefits on auto loans. In order to encourage the use of electric vehicles (EV) in India, the government introduced section 80EEB. Under this provision once in a lifetime individual purchaser of an EV, a total tax exemption of up to INR 1,50,000 per year is available on interest payable on loan taken from a bank or financial institution. This tax break is applicable for both four-wheeler and two-wheeler electric vehicle purchases for loan taken upto 31st March, 2023.
Some initiatives taken include-
- GST on EVs currently is 5% visa-vis 2% earlier.
- Exemption from payment of issuing or renewing registration certificates
- Four-wheel EVs can earn a maximum subsidy of INR 1.50 Lakhs under FAMEII programme, while two-wheelers can get a subsidy of up to 40% of their purchase price.
- Certain state government provide exemption from payment of road fees or road tax and further subsidies on the purchase price of EVs over and above FAMEII programme.
NPowersU Expert Opinion
Steps taken in the development of road infrastructure and EV is in the right direction to control further climate damage. However urgent steps also needs to be taken in building EV infrastructure; be it charging stations at public places or in residential complexes. Half-hearted commitments under any accord to please the world will be of little help to safeguard fragile ecosystems.
‘Only stitch in time will save precious oil and ecosystems’
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