New Delhi: Green mobility was the flavor of finance minister Nirmala Sitharaman’s first budget speech as purchasing electric vehicles has been attractive through income-tax breaks for customers, while lowering the import duties on components.
Sitharaman said the government is concerned about the growing pollution across cities due to emissions, and wants to be more and faster adoption of greener vehicles.
“… to make electric vehicle affordable to consumers, our government will provide additional income tax deduction of Rs 1.5 lakh on the interest. This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase, “the FM said.
The measure is the first direct benefit of the government when they purchase electric cars. Currently, the FAME scheme – meant to encourage electric adoption – provides incentives only for taxis and fleet buyers, while there is no special benefit for private car owners.
The Budget also removed import duty on electric vehicles such as e-drive assembly, on-board charger, e-compressor and charging gun.
And, to boost economic growth and ‘Make in India’, the government will launch a scheme to invite global companies to set up mega-manufacturing plants in sunrise and advanced technology areas such as lithium storage batteries, solar electric charging infrastructure, and provide them investment-linked income tax exemptions
The industry said the focus on electrics will prompt them. “This is a milestone budget for electrics … we will seriously consider new investments,” said Manish Sharma, CEO of Indian operations ofPanasonic(which makes electric batteries for Tesla), said.