Abstract:

The Union Budget 2019-20 presented by Finance Minister envisaged a vision to make India a global hub for manufacturing electric vehicles. During her maiden budget speech, the Finance Minister also outlined various proposals for giving a boost to manufacturing of electric vehicles in India and announced tax rebate for buying electric vehicles.

The Finance Minister also said that the government has already moved to the GST council to lower the GST rate on electric vehicles from 12% to 5%. In order to make electric vehicles affordable to the consumers, the Union Budget 2019 states that the government will provide additional income tax deduction of INR 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. This amounts to a benefit of around INR 2.5 lakh over the loan period to the taxpayers who take loans to purchase an electric vehicle.