Finance Minister Nirmala Sitharaman announced in her first Budget speech in Parliament on Friday that buyers of electric vehicles will get an additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to buy them.

Push for electric vehicles

The measure is part of a wider effort in the Union Budget 2019 to encourage electric vehicles. Sitharaman said the government had already asked the GST Council to cut the tax rate on electric vehicles from 12 percent to 5 percent. The extra deduction, she said, was meant to make such vehicles affordable for consumers.

Other announcements

• A further Rs 1.5 lakh deduction on interest paid on home loans was also announced.
• Sitharaman thanked taxpayers for their contribution to the country’s development, calling them responsible citizens.
• Direct tax collections stood at Rs 11.37 lakh crore for 2018-19, compared with Rs 6.37 lakh crore for 2013-14.

Background

The Budget was the first presented by Sitharaman as Finance Minister, after Narendra Modi was sworn in for a second term on 30 May 2019.

See also: Bharatiya Janata Party | Election news

Originally published on 6 July 2019. Rewritten on 9 October 2026.

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