Electric car tax in India is the lowest of any vehicle type — EVs attract just 5% GST (same as small cars) and are exempt from road tax in Delhi under the Delhi EV Policy 2024. This means the total tax on a ₹15 lakh electric SUV in Delhi is approximately ₹75,000 (5% GST only) versus ₹3.6 lakh (18% GST + 6% road tax) for an equivalent petrol SUV — a saving of ₹2.85 lakh in taxes alone.
Beyond purchase taxes, EVs save significantly on running costs: electricity costs approximately ₹1-2 per kilometre versus ₹4-6 for petrol. This ongoing saving of ₹5,000-8,000 per month makes EVs the most cost-effective vehicle for high-mileage drivers.
Tax Savings: EV vs Petrol SUV
Tata Nexon EV (₹14.5 lakh ex-show): 5% GST = ₹72,500. Road Tax = ₹0 (Delhi exempt). Total tax: ₹72,500. Hyundai Creta petrol (₹13 lakh ex-show): 18% GST = ₹2.34 lakh. Road Tax 6% = ₹78,000. Total tax: ₹3.12 lakh. EV saves ₹2.39 lakh in taxes.
What is the GST on electric cars in India?
Electric vehicles attract 5% GST — the lowest tax bracket for any vehicle type. This is significantly lower than petrol/diesel vehicles which attract 18-28% GST. The 5% GST applies to all EVs including cars, SUVs, and two-wheelers.
Do electric cars pay road tax in India?
Electric vehicles are exempt from road tax in Delhi under the Delhi EV Policy 2024. Several other states (Maharashtra, Karnataka, Rajasthan) offer partial or full road tax exemptions for EVs. The exemption varies by state.
What subsidies are available for buying an EV in India?
FAME III subsidy (Faster Adoption and Manufacturing of Electric Vehicles): up to ₹10,000 per kWh of battery capacity for eligible vehicles. State subsidies vary — Delhi offers additional incentives on top of FAME. Check with your state DISCOM or dealer for current subsidy amounts.
How much do EVs save in taxes compared to petrol cars?
On a ₹15 lakh SUV: EV pays 5% GST = ₹75,000 + ₹0 road tax (Delhi) = ₹75,000 total tax. Petrol SUV pays 18% GST = ₹2,70,000 + 6% road tax = ₹90,000 = ₹3,60,000 total. EV saves ₹2,85,000 in taxes.
Are hybrid cars eligible for EV tax benefits?
No — hybrid cars (both strong hybrid and plug-in hybrid) are taxed at the same rate as equivalent petrol vehicles (18-28% GST). Only pure battery electric vehicles (BEVs) qualify for 5% GST and road tax exemptions.
Official Resources: Parivahan Portal | India GST Portal | NHAI