Major six benefits of switching to Electric Vehicles (EVS)

Current global market focus has shifted to Electric Vehicles due to its own attractiveness. India is one of them and growing at a much faster pace. 

Major six benefits of switching to Electric Vehicles (EVS)

1)Income Tax Benefit- A deduction of 1,50,000 is allowed under section 80EEB on the interest paid on loan taken to buy Electric vehicles. In order to promote the usage of electric vehicles in India, the Union Budget of 2019 proposed to incorporate a brand new section called Section 80EEB in the Income Tax Act of 1961. 

In order to be eligible to claim the tax benefit, the following conditions are to be fulfilled: –

  • Loan should be taken from a bank or specified NBFC.
  • Loan has to be sanctioned between 1st April 2019 and 31st March 2023.
  • This deduction shall not exceed Rs. 1.5 lakh and is allowed to claim from your total income from the financial year 2019-20 and onwards until the loan is repaid.
  • Only interest poetion is allowed as deduction. 

Note -It is not essential for the assessee to use the vehicle for availing the deduction. A vehicle taken for the purpose of usage by a family member, relative, or any other person, may avail the benefits.

2) Lower GST rate – The government has reduced the rate of EVS from 12% to 5%.

3)Exempt from road tax- Electric vehicles are exempt from road tax and registration costs in some states like Delhi, Tamil nadu, etc, this will bring a huge reduction in the purchase price of the vehicle.

4) Exempt from Green Tax – Under the Green Tax policy aiming to reduce

pollution levels, personal vehicles would be charged tax at the time of renewal of registration certificate after 15 years. Whereas, electric vehicles would be exempt from Green Tax entirely.

5) No fuel, no emissions – No petrol or diesel is required in a fully Electric vehicle.

6) Low maintenance – Petrol and Diesel vehicles require expensive engine maintenance over their lifetimes, but electric vehicles don’t. This is because a traditional combustion engine contains hundreds of moving parts that can potentially go wrong, whereas an electric motor has less than 20. This means that your EV is likely to have lower long-term maintenance costs than other vehicles.  

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