Budget 2023: This income tax rebate for EV adoption can get an extension

EV adoption has picked up pace and Budget should help deepen that, feel EV players.

There could be a big push from the Budget 2023 to speed up adoption of electric vehicles in India. The government can extend the income tax rebate offered on buying an electric vehicle by another two years till 2025 making it convenient for potential buyers to switch to the cleaner fuel mobility instead of an internal combustion one.

A CNBC Aawaz report said that the government can extend the income tax rebate under section 80EEB for another two years. The section, which was introduced in the year 2019, offers a deduction of Rs 1.5 lakh on interest on loan taken to purchase an EV between April 1, 2019 and March 31, 2023.

If an extension is granted then loans taken till March 31, 2025 will be covered for claiming the income tax rebate. The deduction under this section is available till the entire repayment of the loan is done.

The government has been putting a lot of efforts to make it affordable to buy an EV.  High battery cost remain a factor that adds to the overall acquisition cost of an EV. Rapid infrastructure development is also needed to create charging points across the country.