THIRUVANANTHAPURAM: In a significant move to restructure vehicle taxation, the government has announced a revised road tax structure for electric vehicles (EVs). The new policy aims to make affordable electric cars more accessible to the public by slashing tax rates on budget and mid-range segments, while introducing a higher tax rate for luxury electric vehicles.
According to the official document, the road tax for EVs has been categorized into different price brackets, introducing the following major revisions:
Key Tax Revisions:
- Budget EVs (Up to ₹10 Lakh): To encourage mass adoption, the road tax for entry-level electric vehicles has been reduced from 5% to 3%.
- Mid-Range EVs (₹15 Lakh – ₹20 Lakh): Buyers in this segment will also see relief, as the tax rate drops from 8% to 5%.
- Luxury EVs (Above ₹40 Lakh): On the flip side, premium and luxury electric vehicles will become more expensive, with the road tax increasing from 10% to 15%.
Unchanged Categories:
The government noted that there are no changes to the tax rates for the remaining brackets. The tax remains steady at 5% for vehicles priced between ₹10 Lakh and ₹15 Lakh, and at 10% for those in the ₹20 Lakh to ₹40 Lakh range.
New EV Tax Structure At a Glance:
| Electric Vehicle Price | Current Tax Rate | Revised Tax Rate | Status |
| Up to ₹10 Lakh | 5% | 3% | Reduced 📉 |
| ₹10 – ₹15 Lakh | 5% | 5% | No Change |
| ₹15 – ₹20 Lakh | 8% | 5% | Reduced 📉 |
| ₹20 – ₹30 Lakh | 10% | 10% | No Change |
| ₹30 – ₹40 Lakh | 10% | 10% | No Change |
| Above ₹40 Lakh | 10% | 15% | Increased |
