EV buyers to get benefit of additional IT deduction of Rs 1.5 lakh: Budget 2019-20
To further incentivise e-mobility, budget 2019-20 has exempted customs duty on certain auto components (parts) of electric vehicles
With India aiming to increase number of electric vehicles (EVs) on the road, budget 2019-20 has outlined various proposals to give a boost for manufacturing of EVs and developing India as a global hub for the same.
To make electric vehicles affordable to consumers, Budget 2019-20 has announced additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. “This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicle,” said Minister of Finance and Corporate Affairs Nirmala Sitharaman while presenting the budget. Union Government has already moved GST council to lower the GST rate on electric vehicles from 12 per cent to 5 per cent.
In her budget speech, Sitharaman said, “Under phase II of the FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) scheme, only advanced battery and registered e-vehicles will be incentivized, with greater emphasis on providing affordable and environment friendly public transportation options for the common man. The main objective of the Scheme is to encourage faster adoption of electric vehicles through upfront incentive on purchase of such vehicles and also by establishing the necessary charging infrastructure for the same. Phase II of FAME has an outlay of Rs 10,000 crore for a period of 3 years, and has commenced from 1st April, 2019.”
The Finance Minister said that the inclusion of solar storage batteries and charging infrastructure in the FAME scheme will give a boost to manufacturing, which is needed for India to leapfrog and become a global hub for manufacturing of these vehicles.
To further incentivise e-mobility, budget 2019-20 has exempted customs duty on certain parts of electric vehicles.