According to tax experts’ calculations, electric vehicles would be included in the category of engine-less vehicles, as defined by the Finance Act of 2023. If the car is valued at more than five million rupees, an estimated 3% tax rate will be applied. Although electric vehicles are not specifically mentioned in the laws, experts have made this inference from the specified criteria.
Additionally, all completely knocked-down (CKD) autos are subject to an additional 1% increase. As a result, the new tax rate is set at 4%. Surprisingly, this rate is unaffected by any factors, including money and engine power, among others.
Latest Updates to Income Tax
The Finance Act 2023 introduces revised income tax prevents that have a direct impact on the fixed tax rate applicable to vehicles based on their specific engine capacities. Let us explore the details of the updated slabs:
Also read more: 5 Habits that are killing your Car’s Mileage
Engine Capacity 2001cc to 2500cc: Vehicles falling within this engine capacity range will be subjected to a fixed tax rate of 6 percent of the vehicle’s value.
Engine Capacity 2501cc to 3000cc: For vehicles with engine capacities falling between 2501cc and 3000cc, the fixed tax rate has been set at 8 percent.
Engine Capacity Above 3000cc: vehicles with engines that are larger than the limit of 3000cc will be liable for a fixed tax rate of 10 percent based on the vehicle’s value.
While the Finance Act 2023 offers some clarification on the tax rates for regular motor vehicles, specific tax rates for the registration of electric vehicles are still up for debate among tax professionals.
Follow us on Facebook
The government has projected a tax rate of 3% for electric vehicles with a value of at least five million rupees in an effort to encourage the adoption of green transportation solutions. Additionally, all consumers will be subject to a consistent 4 percent tax on completely knocked-down (CKD) vehicles. As the market for electric vehicles grows, it is essential for the government to establish clear regulations to guarantee an equitable and transparent taxation system for everyone.
