Budget 2019 came in a new way by introducing various incentives for electric vehicles. The finance minister, came up with a bundle of provisions for a faster adoption of Electric vehicles. Continuation of the FAME policy with an inclusion of battery powered vehicles, e-rickshaws and strong and plug-in Hybrid technology.
Furthermore, there is a tax deduction on EV chargers to 5% from 18%. This is an extension step to the reduction of tax on electric vehicles from 12% to 5%.
Additionally, an exemption of 1.5L on tax for the interest paid on loan for buying Electric vehicles is also on budget papers. On the reality front, there are even charges exemption on the registration of electric vehicles (2,3 &4 wheeler).
Moreover, there are a wide range of incentives at the state government and corporate levels too.
Under the exemption list, the heavy vehicles bought by local government (more than 12 seating capacity) is also present. Separately, there is a exclusive allocation of nearly 1,000 Crores for setting up charging stations around roads.
Under the FAME scheme, companies are being provided financial assistance and encouragement to develop necessary technology and infrastructure needed for electric vehicles.
FAME-I came up with concentration on corporate sector. That includes encouragement, providing incentives and attracting foreign electric automakers. Section 10AA of Income Tax Act,1961 provides tax exemptions on export activities in electric vehicles sector. The scheme would be providing 100% exemption for first 5 years and 50% for next 5 years. FAME-II concentrates on consumer and government levels.
Meanwhile, encouragement for e-vehicles is becoming a punishment on petrol and Diesel vehicle owners. On the other hand, government proposes to increase Diesel and petrol charges by Rs 1/- and the registration fees for the same vehicles will also increase to sharp heights.