Gujarat Govt Announces 5% Vehicle Tax Exemption Till March 2026

The state government has introduced the vehicle 5% tax exemption on fully electric vehicles for buyers until March 31, 2026, to encourage more people to buy them, leading to increased sales.

The initiative, which was part of the recent state budget, came into effect on Friday after the required administrative steps were finished.

An official stated that under the new scheme, buyers of electric vehicles will be required to pay only 1% as vehicle tax. For example, a vehicle priced at Rs. 12.49 lakh, which used to have a tax of Rs. 74,940, will now only be taxed at Rs. 12,490, saving Rs. 62,450.

As per the transport department official, in the two-wheeler category, the vehicle tax savings would range between Rs. 5,000 and Rs. 10,000, based on the cost of the vehicle.

The initiative aims at increasing EV Sales as it was observed that the EV sales had decreased over the last year. The Department has also cut the tax on maxi cabs to 6% from the current 8% and 12%. This would benefit the tourism industry by making maxi cabs more affordable.