Here is how Govt aims to promote Green Transport
New Delhi, July 05: The government has announced tax concession for promoting sale of electric vehicles the country.
While presenting her maiden budget, Union Finance Minister Nirmala Sitharaman on Friday also outlined various proposals for giving a boost to manufacturing of electric vehicles and developing India as a global hub for the same.
The Minister said that the government aims to make Electric Vehicles affordable to consumers and hence is offering tax concessions for the buyers.
"The Government will provide additional income tax deduction of Rs. 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. This amounts to a benefit of around Rs. 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicle," announced Sitharaman in her budget speech.
Considering India's large consumer base, the Finance Minister said, "We aim to leapfrog and envision India as a global hub of manufacturing of Electric Vehicles. Inclusion of Solar storage batteries and charging infrastructure in the above scheme will boost our efforts".
The Government has already moved GST council to lower the GST rate on electric vehicles from 12 per cent to 5 per cent, she added.
Talking about the the FAME Scheme (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles), Nirmala Sitharaman said that Under Phase-II of the FAME Scheme, only advanced battery and registered e-vehicles will be incentivized, with greater emphasis on providing affordable and environment friendly public transportation options for the common man."
The main objective of the Scheme is to encourage faster adoption of electric vehicles through upfront incentive on purchase of such vehicles and also by establishing the necessary charging infrastructure for the same. Phase II of FAME has an outlay of Rs 10,000 crore for a period of 3 years, and has commenced from 1st April, 2019.
The First Phase of FAME Scheme was implemented on April 1, 2015.
Main thrust of FAME is to encourage electric vehicles by providing subsidies. FAME focuses on 4 areas: Technology development, Demand Creation, Pilot Projects and Charging Infrastructure.