Ahmedabad: Gujarat Government has announced a 5% tax exemption on fully electric vehicles till March 31, 2026 to promote sustainable transport. The tax rate has now come down to just 1%. Citizens can now register their electric vehicles online through the Vahan 4.0 portal and get the direct benefit of it. Gujarat government announced this tax reduction in the budget for the year 2025-26 which has now been implemented.
An order has been issued to collect 1 percent tax on electric vehicles which was earlier 6 percent. A circular has been issued to collect tax at only 1 percent depending on the type of vehicle. Following which, from now on, RTO vehicle tax will be collected at 1 percent only on electric vehicles. Giving 5 percent discount in tax will benefit vehicle owners.
Car owners will get a direct benefit of 30 thousand to 1 lakh. It is likely that the sale of electric vehicles will increase again. Here we can try to understand through example. If you have an EV car worth Rs 10 lakh, then earlier 6% tax was levied on it. According to which, you had to pay 60 thousand in tax. But now by giving a 5% discount, you will get a direct benefit of Rs 50 thousand and only Rs 10 thousand will have to be paid as tax.
To increase the sales of electric vehicles, the Gujarat government had first given a subsidy of Rs 25,000 for two-wheelers and Rs 1.50 lakh for four-wheelers priced below Rs 15 lakh. This subsidy has been discontinued for the last one year. After the subsidy was discontinued, there has been a decline of up to 50 percent in the sales of electric vehicles.
