According to the Income Tax website, “electric vehicle” means a vehicle powered solely by an electric motor, the traction energy of which is supplied solely by a traction battery installed in the vehicle, and has such an electric regenerative braking system that provides for the conversion during braking to kinetic energy of the vehicle into electrical energy.”
There are banks that offer car loans for electric vehicles and that too at special interest rates. Here’s a look at banks that offer car loans for electric vehicle purchases.
SBI Green Loan
The State Bank of India launched the country’s first Green Car Loan (electric vehicle) to encourage consumers to buy electric cars. The new system will offer credit at a rate 20 basis points lower than the current vehicle credit plan. The margin will be up to 90% of street price up to 100% on select models, according to the SBI website. Green car loan interest rates vary from 7.05% to 7.75%.
Union Green Miles
Here’s a look at the details of the Union Bank Green Miles EV car loan, according to the bank’s website:
- The loan can be availed by individuals for personal use:
- Purchase of a new electric 4-wheeler
- Buying a new electric two-wheeler
- The program will be operational across India.
- Resident Indian Citizens and Non-Resident Indians (NRIs).
- Minimum age – 18 years and maximum age – 75 years.
- Individuals who have a steady source of income past age 60 may be eligible for repayment beyond age 60.
- Individual, either individually or jointly with other eligible persons. Limitation of the maximum number of applicants to 3 (main applicant + maximum 2 co-applicants)
- Only the following family members are admitted as applicants/co-applicants:
- unmarried daughter
QUANTUM OF LOANS
- Minimum – No upper limit
- Maximum – as below:
- New electric 4 wheeler – no upper limit
- New electric two wheeler – Rs.10 lakh
VEHICLE CREDIT MARGIN, ie YOUR SHARE
The margin of 10% is to be provided by the borrower, regardless of the subsidy. The advance grant received from the state government. is adjusted to the eligible loan amount.
- New electric 4-wheeler – 84 months
- New electric two-wheeler – 36 months (60 months under commitment)
UNION GREEN MILES INTEREST RATE
- 20 bps concessions in the applicable Union Mile interest rate.
- The ROI is linked to the CIBIL score. In the case of corporations/partnerships/joint applicants, the interest rate will apply to the CIBIL score of the applicant/director/partner with the lowest CIBIL score among all applicants/directors/partners.
Axis new car loan
The EV car loan is offered to employed and self-employed consumers and offers up to 85% financing for on the go. The term of the loan is a maximum 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 is offering a 50 basis point lower interest rate on EV auto loans.
Tax deductions on electric vehicle loans
Section 80EEB provides for an aggregate tax exemption of up to Rs 1,50,000 on EV loan repayment from tax year 2020-21. This tax credit applies to both four-wheel and two-wheel electric vehicles.
The loan must be approved between April 1, 2019 and March 31, 2023 and is only available to individual taxpayers or entrepreneurs. Some states also exempt electric vehicles from paying road taxes and registration fees.