Going electric with your next vehicle purchase? That’s an excellent decision for your pocket and the environment! But before you hit the order button, it’s essential to factor in the taxes and incentives applicable in your state.
Road tax rebates offered on electric vehicles (EVs) vary across different states in India. This handy guide will tell you exactly how much tax benefit you can avail of on an EV in your state.
We’ve compiled all the details in easy-to-understand tables. There’s also a state-wise breakup of the latest developments that impact EV adoption. Let’s get started!
A Quick Primer on Road Taxes in India
Taxes aren’t the most exciting topic but bear with me on this short primer before we get to the juicy EV rebate part.
When you purchase a new vehicle in India, a one-time road tax or registration fee needs to be paid upfront to the Regional Transport Office (RTO). This tax is levied under the Motor Vehicles Taxation Act.
The road tax component can range from 6% to 15% of the vehicle’s cost for conventional petrol and diesel vehicles. It’s a pretty hefty amount!
The road tax structure is complex and depends on factors like:
- Engine capacity
- Cost price
- Seating capacity
- Fuel type
- And more
Now, why is this road tax levied in the first place?
Also Read: Tesla Sales Jump 83% from a Year Ago on Tax Credits and Broader Adoption
Key reasons for road tax:
- The major revenue source for state governments
- Used for building and maintaining roads
- Based on the ‘polluter pays’ principle – higher taxes on more polluting vehicles
So, in a nutshell, you pay more road tax for more oversized, more polluting vehicles. And that brings us to…
The Road Tax Rebates Offered on EVs
One of the critical reasons for the higher adoption of EVs in India is the lower road taxes levied on them. Let’s look at some of the motivations behind lower road tax on EVs:
✅ More affordable – Lower taxes make EVs price competitive against petrol/diesel models
✅ Incentivize purchases – Rebates encourage people to switch to EVs
✅ Support local industry – Promotes domestic EV manufacturers
✅ Environmental benefit – Reward for choosing the greener transport option
Great, now we have the background context. Let’s dive into the specific EV road tax rebates applicable in each state.
State-Wise Road Tax Rebates on EVs
Note: The rebates are applicable on battery-powered pure electric models. Hybrid EVs may have different rebate structures based on the state.
Phew, that was a lot of info to pack in! Let’s summarise the key highlights:
- Up to 100% tax rebate – Majority of states offer 100% exemption on road taxes for EVs
- Time-bound incentives – Some states provide rebates valid for a certain period
- No limits – Many states have not set any limits or caps on the rebate amount
- Partial rebates – Only a few states offer 50% or 25% exemptions
So, in most states, EV buyers can enjoy zero road taxes. That’s a direct discount of 6-15% on the vehicle cost!
Look at some of the latest developments in the Indian EV space.
The Road Ahead: Recent Developments That Impact EV Adoption
The EV industry is evolving rapidly in India. Here are some promising updates in 2022 that will encourage faster adoption:
More affordable EV models launched
- Tata Tiago EV – Priced from ₹8.5 lakhs, offers a realistic and affordable EV option
- Ola S1 – An electric scooter priced at just ₹99,999 after state subsidies
- Ather 450X Gen 3 – The latest update further reduces the price by ₹15k
New EV policies announced
- Gujarat – ₹870 crore EV policy largely focuses on EV infra and manufacturing
- Kerala – ₹103 crore EV policy aims for 1 lakh EVs in the next 5 years
Charging infrastructure expansion
- Delhi – Targets 18,000 charging points by 2024
- ABB – Partners with MG Motor to set up EV fast chargers across India
Entry of new players
- BYD India – Warren Buffet-backed Chinese company enters India’s EV space
- Hyundai – Plans to invest ₹4,000 crore in India on EVs
The stage seems set for the rapid growth of EVs in India, with promising government support through policies and private-sector investments.
Read This: Why Battery Capacity Matters for Purchasing EVs in India
Let’s recap the key takeaways
I’ve jam-packed a lot of information in this guide. Here are the key highlights once again:
- Road tax is a one-time fee paid on new vehicles as per state rules
- This component makes up 6-15% of a vehicle’s on-road price
- States offer 50-100% exemption on road taxes for EVs as an incentive
- The rebate amount and validity period vary across different states
- Recent updates indicate an acceleration in India’s EV adoption in the future
So what are you waiting for? If you plan to buy an EV, check out your state’s applicable road tax rebate and enjoy the discount!
Please share this guide with friends and family interested in buying an electric car or two-wheeler. This breakdown of state-wise EV road tax rebates was informative and informative.
Happy electric rides!
