The electric vehicles come as an appropriate modern solution aimed at maximizing the benefits of environmental protection from the Indian perspective. Various governments in the world have been working in order to cut down the use of petrol, control pollution and promote cleaner ways. In this direction, India is also offering central and state-level incentives for adoption of EVs. Such incentives not only help reduce the cost of purchasing the vans but also ensure that there’s a clean environment for the coming generations.
Here is what we will cover in this blog:
- A breakdown of state-wise incentives for EVs
- Central government policies to boost EV adoption
- Step-by-step guide on how to claim those perks
Central Government Incentives for EV Buyers
Credits: Canva
It is however important to note that even before looking into specific state incentives, there are certain generic incentives which are offered by the central government of India which are available to EV buyers of all States.
1. FAME India Scheme
The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme is one of the flagship programs initiated by the Indian government to promote EV adoption. The scheme is divided into two phases:
- FAME I: Focused on providing subsidies for electric two-wheelers, three-wheelers, four-wheelers, and public buses.
- FAME II: Expands the focus on charging infrastructure and public transport electrification, along with electric three-wheelers and four-wheelers for commercial use.
Buyers can avail substantial discounts under this scheme, especially for electric buses, three-wheelers, and passenger EVs.
2. Income Tax Benefits
Under Section 80EEB of the Income Tax Act, individuals can claim a deduction of up to ₹1.5 lakhs on the interest paid on loans taken to purchase EVs. This deduction applies to both two-wheelers and four-wheelers, providing a significant financial boost to potential EV buyers.
3. Customs Duty Exemption
The central government has further permitted customs duty on specific components in the aspect of electric vehicle production. This exemption reduces the cost of production for manufacturers and in the end, helps in reducing the cost of EVs to the consumers.
State-Specific EV Incentives in India
The recognition of EV adoption needs the backing of individual state governments, and several of them have embarked on offering such incentives. Below is a breakdown of the incentives provided by some of the leading states:
| State | Subsidy for Electric Cars | Subsidy for Electric Two-Wheelers | Road Tax Exemption | Registration Fee Exemption |
| Delhi | Up to ₹1.5 lakhs | Up to ₹30,000 | Yes | Yes |
| Maharashtra | Up to ₹1 lakh | Up to ₹25,000 | Yes | Yes |
| Karnataka | No direct subsidy | No direct subsidy | Yes | Yes |
| Gujarat | ₹10,000 per kWh (Max ₹1.5 lakhs) | Up to ₹20,000 | Yes | Yes |
| Tamil Nadu | No direct subsidy | No direct subsidy | Yes | Yes |
| Telangana | Up to ₹1.5 lakhs | ₹10,000 | Yes | Yes |
| Rajasthan | Varies based on vehicle | Varies based on vehicle | Yes | Yes |
| West Bengal | Up to ₹1 lakh | Up to ₹20,000 | Yes | Yes |
1. Delhi
There are many measures taken by the Government of Delhi in order to promote the registration of electric vehicles, including various compensations:
- Subsidy: A person who purchases electric cars can obtain a subsidy of ₹ 1.5 Lakhs whereas buyers of electric two-wheelers can get as much as ₹ 30,000.
- Tax Benefits: In Delhi, there are no road tax and registration fees for the EVs therefore possessing an EV is quite easy.
- Scrappage Incentive: Additional benefits are offered if the buyer scraps an old internal combustion engine vehicle.
2. Maharashtra
Maharashtra is very diligent in implementing several strategies aimed at enhancing the acceptance level of EVs.
- Subsidy: An electric car buyer can receive up to 1 lakh for an electric vehicle. The two-wheelers can get a subsidy amount of up to ₹25,000.
- Exemptions: For all EVs, Road tax and registration fees are not charged which minimizes the general selling price.
- Scrappage Benefits: Additional incentives for scrapping old vehicles, further lowering the cost of an EV purchase.
3. Karnataka
Karnataka has positioned itself as a hub for EV innovation and manufacturing:
- Exemptions: All EVs are exempt from road tax and the state is concentrating more towards building a well-powered charging station infrastructure making it hassle-free as well as budgeted to ride on an EV.
- EV Ecosystem: The state has also partnered with private bodies to create awareness on the benefits of EVs and the importance of good roads and designated parking spaces for EVs.
4. Gujarat
Gujarat’s proactive stance on EV adoption includes:
- Subsidy: ₹10,000 per kWh of battery capacity for electric cars, up to a maximum of ₹1.5 lakhs, and up to ₹20,000 for electric two-wheelers.
- Exemptions: No road tax or registration fee is required for EVs in Gujarat, further reducing costs for consumers.
5. Tamil Nadu
Tamil Nadu is not only supporting EV buyers but also investing heavily in EV infrastructure:
- Exemptions: A 100% exemption from road tax is offered for EV purchases.
- State Targets: Tamil Nadu has set ambitious targets for increasing EV adoption and developing the necessary charging infrastructure.
6. Telangana
Telangana offers a variety of incentives to make EVs more appealing:
- Subsidy: ₹10,000 for electric two-wheelers and up to ₹1.5 lakhs for electric cars.
- Exemptions: As with other states, road tax and registration fees are waived, lowering the overall cost of ownership.
7. Rajasthan
Rajasthan is encouraging EV adoption through the following:
- Subsidy: Available for both electric two-wheelers and cars, although the specific amounts may vary depending on vehicle type.
- Exemptions: Registration fees and road tax are completely waived for EVs.
8. West Bengal
West Bengal’s initiatives aim to boost EV sales across the state:
- Subsidy: Up to ₹1 lakh for electric cars and ₹20,000 for electric two-wheelers.
- Exemptions: Road tax and registration fees are waived, contributing to reduced overall costs for consumers.
How to Claim EV Incentives in India
While the incentives are attractive, buyers need to follow a set process to avail them. Here’s a step-by-step guide to claiming state incentives for EV purchases:
1. Check Eligibility
Ensure that the electric vehicle you plan to purchase is eligible for state incentives. This information is typically available on the official website of the state government or directly from dealerships.
2. Purchase the EV
You have to buy an electric car from a dealer who has registered himself with the banks and knows about the incentive schemes. Most dealers are familiar with the existing incentives and can help you complete the application for the incentives.
3. Submit Required Documents
Attach proofs of residence, purchase invoices, and vehicle registrations. Such are the basic documents that most people will require, although states may have slight variations in these and other practices.
4. Apply for the Subsidy
Complete the subsidy application form for which most times the application can be done online at the official site of the transport department of the state. Kindly give the correct as well as the complete information in order to avoid any delays in processing such paperwork.
5. Wait for Approval
After submitting the application, the processing period can vary. It typically takes a few weeks, but delays are possible due to high demand or incomplete documentation.
6. Receive the Subsidy
The moment whenever the application is approved the subsidy amount gets generally credited to the given bank account. Some states allow the issuance of subsidies during the time of purchase while others will pay back after the purchase.
Maximizing Your EV Savings
Credits: Canva
To maximize your savings when purchasing an EV, it’s essential to combine state and central incentives effectively. Here are a few tips:
1. Combine Central and State Incentives
Both central and state governments offer incentives for EV purchases. Combining them can significantly lower the overall cost of ownership.
2. Take Advantage of Income Tax Deductions
If you’re financing your EV purchase with a loan, don’t forget to claim the tax deduction available under Section 80EEB, which allows for a deduction of up to ₹1.5 lakhs on interest payments.
3. Scrappage Schemes
Many states offer additional subsidies if you scrap an old internal combustion engine vehicle when purchasing an EV. This can further reduce the upfront cost of your new EV.
4. Stay Updated on New Policies
EV incentives can change as new policies are introduced. Keep an eye on government announcements and check with local dealerships to stay informed about the latest offers and incentives.
Conclusion
Electric vehicles are undoubtedly the future of sustainable transportation in India. With central and state governments offering attractive incentives, now is the perfect time to switch to an EV. By understanding the available incentives and following the right steps to claim them, you can make your transition to electric mobility both affordable and hassle-free.
So, whether you’re considering a sleek electric car or a more affordable electric two-wheeler, be sure to take full advantage of the subsidies, tax exemptions, and incentives offered by your state and the central government.
