According to the Income Tax website, “electric vehicle” means a vehicle that is propelled exclusively by an electric motor whose traction energy is supplied exclusively by a traction battery installed in the vehicle and has a such a regenerative electric braking system which, during braking, allows the conversion of the kinetic energy of the vehicle into electrical energy.
Some banks offer car loans for electric vehicles and that too at special interest rates. Here is an overview of the banks that offer car loans for the purchase of electric vehicles.
SBI Green Loan
The State Bank of India has launched the country’s first “Green Car Loan” (electric vehicle) to encourage consumers to buy electric cars. The new system will offer loans at a rate 20 basis points lower than the current car loan system. The markup will be up to 90% of the 100% on-road price on some models, according to the SBI website. Green auto loan interest rates range from 7.05% to 7.75%.
Union Green Miles
Here is an overview of the details of the Union Bank Green Miles car loan for electric vehicles according to the bank’s website:
- The loan can be used by individuals for personal use:
- Purchase of a new electric 4 wheeler
- Purchase of a new electric 2-wheeler
- The program will be operational across India.
- Resident Indian Citizen and Non-Resident Indians (NRI).
- Minimum age – 18 and maximum age – 75.
- A person with a regular source of income after age 60 may be considered for reimbursement beyond age 60.
- Individual, alone or jointly with other eligible persons. Maximum applicants should be limited to 3 (lead applicant + maximum 2 co-applicants)
- Only the following family members are permitted as applicants/co-applicants:
- Unmarried daughter
- Minimum – No cap
- Maximum – as under:
- New electric 4 wheeler – Without ceiling
- New Electric 2 Wheeler – Rs.10 Lakh
MARGIN ON VEHICLE LOAN, THAT IS YOUR SHARE
A margin of 10% will be provided by the borrower, regardless of the subsidy. The initial grant received from the state government. will be adjusted based on the eligible loan amount.
- New electric 4 wheeler – 84 months
- New electric 2 wheels – 36 months (60 months under mooring)
UNION GREEN MILES INTEREST RATES
- Concessions of 20 basis points on the interest rate applicable to the union mile.
- The return on investment is linked to the CIBIL score. In the case of companies/corporate partners/joint applicants, the interest rate is applicable to the CIBIL score of the applicant/manager/partner with the lowest CIBIL score among all the applicants/managers/partners.
Axis new car loan
The electric vehicle car loan is offered to salaried and self-employed consumers and allows up to 85% financing on the road. The loan is for a maximum term of seven years. Axis Bank offers EV loans in Delhi NCR, Mumbai, Bengaluru, Hyderabad, Pune, Jaipur, Ludhiana, Kochi, Ahmedabad, Chennai, Vishakhapatnam, Trivandrum, Surat, Kolkata and Chandigarh.
Axis Bank offers 50 basis points lower interest rate on electric vehicle car loan.
Tax deductions on the loan for electric vehicles
Section 80EEB allows full tax exemption of up to Rs 1,50,000 when repaying an EV loan from assessment year 2020-21. This tax credit is valid for electric vehicles with four wheels as well as for two wheels.
The loan must be approved between April 1, 2019 and March 31, 2023, and is only available to individual taxpayers or business owners. In some states, electric vehicles are also exempt from paying road taxes and registration fees.