New Delhi: To accelerate the acceptance of electric vehicles (EVs), Finance Minister Nirmala Sitharaman proposed various tax benefits for them in the Budget 2019-20.
Sitharaman, in her maiden budget presented on Friday, said that the government aims to leapfrog and envision India as a global hub of manufacturing of electric vehicles.
Besides, the government has already moved the GST Council to lower the GST rate on electric vehicles from 12 per cent to 5 per cent, she said.
"Also to make electric vehicle affordable to consumers, our government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles," Sitharaman said.
"This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicles."
The government has also implemented the phase-II of FAME Scheme, following approval of the Cabinet with an outlay of Rs 10,000 crore for a period of 3 years. It commenced from April 1, 2019.
The main objective of the scheme is to encourage faster adoption of electric vehicles by way of offering upfront incentive on purchase of electric vehicles and also by establishing the necessary charging infrastructure for electric vehicles.