The Gujarat Government has announced a 5 percent tax exemption on fully electric vehicles until March 31, 2026, reducing the tax rate to just 1 percent. Earlier, the tax rate was 6% lump sum motor vehicle tax, but now, with the rebate, the effective tax rate is 1%.
The tax exemption is expected to benefit electric vehicle owners by ₹30,000 to ₹1 lakh, depending on the cost of the vehicle.
Citizens can now register their electric vehicles online through the Vahan 4.0 portal to avail direct benefits. As a result of this action, EV’s in gujarat will be significantly more affordable for citizens.
Previously, purchasing an EV priced at ₹10 lakh meant paying ₹60,000 in tax. Now, buyers will pay only ₹10,000—saving a flat ₹50,000.
The policy change comes at a crucial time, as EV sales in Gujarat had declined by over 50% following the cessation of state subsidies a year ago. The new tax structure is expected to rejuvenate the EV market by providing financial relief to consumers.
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