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EV Subsidy in India: PM E-DRIVE, GST and State Incentives
The main central subsidy is PM E-DRIVE: an eligible electric scooter or motorcycle gets ₹2,500 per kWh of battery, up to ₹5,000, if its ex-factory price is up to ₹1.5 lakh, until 31 March 2028 or until the money runs out. There is no central subsidy for electric cars. All EVs pay 5% GST, pay no fee for the RC and number, and get a green number plate. The income-tax deduction under section 80EEB covered only loans sanctioned by 31 March 2023. Road tax and extra cash incentives depend on your state.
- e-2W subsidy
- ₹2,500/kWh, max ₹5,000
- Scheme ends
- 31 Mar 2028 (or when funds run out)
- Electric cars
- No central subsidy
- GST
- 5% on EVs and chargers
- RC fee
- Nil for battery vehicles
On this page
Which EV incentives are there, and when do they end?
Check each incentive against the date you will buy and register the vehicle. A subsidy that ends, or runs out of money, before your registration date does not apply to you.
| Incentive | Benefit | Valid until |
|---|---|---|
| PM E-DRIVE: eligible electric scooter or motorcycle | ₹2,500 per kWh, up to ₹5,000 | 31 Mar 2028, or earlier if the fund is used up |
| PM E-DRIVE: eligible e-rickshaw or e-cart | ₹2,500 per kWh, up to ₹12,500 | 31 Mar 2028, or earlier if the fund is used up |
| PM E-DRIVE: electric auto (L5) | None now | Closed on 26 Dec 2025 |
| GST on every EV and charger | 5% instead of 18% or 40% | No end date set; until the GST Council changes it |
| RC and number fee, every battery vehicle | No fee to issue or renew the RC or assign a number | No end date set (notification of 2 Aug 2021) |
| Green plate and permit, every battery vehicle | Green plate; no permit needed to carry passengers or goods | No end date set |
| Section 80EEB, individuals with an EV loan | Interest deduction up to ₹1,50,000 | Only loans sanctioned 1 Apr 2019 – 31 Mar 2023 |
| Maharashtra: EVs sold and registered there | Full motor vehicle tax exemption | 31 Mar 2030 |
How much is the PM E-DRIVE subsidy?
PM E-DRIVE is run by the Ministry of Heavy Industries. It began in October 2024 and has been extended to 31 March 2028, with a total outlay of ₹11,900 crore. It is fund-limited: if a vehicle category's money runs out before that date, that part of the scheme closes early.
Electric scooter or motorcycle (e-2W)
- ₹2,500 for each kWh of battery, up to ₹5,000 per vehicle (for example, a 2 kWh battery gives ₹5,000, and so does a 3 kWh one).
- The vehicle's ex-factory price must be ₹1.5 lakh or less, and the subsidy can't exceed 15% of that price.
- It must be a registered model with an advanced battery, on the scheme's list of eligible models. Low-speed scooters that need no registration don't qualify.
- Privately owned and company-owned e-2Ws both qualify. The e-2W part now runs until 31 March 2028 (amendment of 10 August 2026), with funds for about 45.79 lakh vehicles.
- Vehicles registered in 2024-25 got ₹5,000 per kWh, up to ₹10,000. That higher rate has ended.
Electric car
- PM E-DRIVE has no subsidy for private electric cars. Its categories are two-wheelers, e-rickshaws and e-carts, e-ambulances, e-trucks, e-buses and chargers.
- What a car buyer does get centrally: 5% GST, no RC fee and a green plate.
- Any cash incentive or road-tax waiver for a car comes from your state's EV policy.
E-rickshaw or e-cart
- ₹2,500 for each kWh, up to ₹12,500 per vehicle (the earlier rate was ₹5,000 per kWh, up to ₹25,000).
- Ex-factory price up to ₹2.5 lakh, and never more than 15% of that price.
- Runs until 31 March 2028, if funds last.
- The separate category for electric autos (L5) closed on 26 December 2025 after its target was reached.
How do you get the PM E-DRIVE subsidy?
You don't fill in a subsidy form. The discount is given at the time of sale through an e-voucher, and the manufacturer claims the money back from the ministry.
YouDealer / PM E-DRIVEPayment
- Check that the model is on the PM E-DRIVE list of eligible models
- Ex-factory price ₹1.5 lakh or less, and fund still open?No: no central subsidy; check your state's policy
- At the dealer, verify with Aadhaar face authentication in the PM E-DRIVE app
- The e-voucher is generated; a download link goes to your registered mobile
- Pay the price minus the subsidy
- The vehicle is registered, with a green number plate
- Before you choose, open the PM E-DRIVE eligible models list and check that the exact model and variant are on it.
- Ask the dealer to show the subsidy as a separate line on the quotation and invoice.
- At purchase, the dealer starts the e-voucher. You complete Aadhaar e-KYC with face authentication on the PM E-DRIVE app. Only you should handle your own face check.
- The e-voucher download link is sent to your registered mobile number. Keep it with the invoice.
- The invoice shows the reduced price. The dealer completes registration, and you get an RC with a green number plate.
✔ You'll know it worked when your invoice shows the PM E-DRIVE amount deducted and you have the e-voucher link on your phone.
Open PM E-DRIVE (official) pmedrive.heavyindustries.gov.in
How much GST do you pay on an EV?
Since 1 August 2019, GST on all electric vehicles is 5%, and on chargers and charging stations 5%. The government confirmed the 5% rate for electric cars, two-wheelers and three-wheelers in August 2026.
The GST reform of 22 September 2025 cut tax on many petrol vehicles, so the gap is smaller than before:
| Vehicle | GST from 22 Sep 2025 |
|---|---|
| Electric car, scooter or three-wheeler | 5% |
| Small petrol car (under 1,200 cc, up to 4 m long) | 18% (was 28%) |
| Small diesel car (under 1,500 cc, up to 4 m long) | 18% (was 28%) |
| Larger car (over 1,500 cc or over 4 m) | 40%, no cess |
| Motorcycle up to 350 cc | 18% (was 28%) |
| Motorcycle over 350 cc | 40% |
GST is already inside the ex-showroom price, so you don't pay it separately. To see what it means over the years of ownership, use the petrol vs EV cost calculator.
Is there an income-tax benefit on an EV loan?
Not for a loan taken now. Section 80EEB of the Income-tax Act, 1961 let an individual deduct the interest on a loan for an electric vehicle, up to ₹1,50,000. It applied only if a bank or financial institution sanctioned the loan between 1 April 2019 and 31 March 2023.
- A loan sanctioned after 31 March 2023 gets no EV-specific deduction.
- The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. If you still pay interest on an older EV loan, check how it is treated under the new Act on the Income Tax e-filing portal or with a tax adviser before you claim.
- The vehicle had to run only on an electric motor and its battery; hybrids did not count.
Business owners who use a vehicle for work follow the normal business-expense rules, which are not specific to EVs.
What do you save on registration, and what plate does an EV get?
- No registration fee: since a 2 August 2021 notification (GSR 525(E)), battery-operated vehicles pay no fee to issue or renew the RC or to be assigned a new registration number.
- Road tax is a state tax. The Transport Ministry has advised states to waive it on EVs, but each state decides. See state policies.
- Other charges, such as the HSRP plate cost, smart card and insurance, still apply.
Private EV
- Number plate: white letters on a green background (rule notified 10 August 2018).
- The registration steps are the same as for any new vehicle; the dealer usually does them.
Transport EV (taxi, goods vehicle, e-rickshaw)
- Number plate: yellow letters on a green background.
- Battery-operated vehicles are exempt from the permit requirement for carrying passengers or goods.
- The driver still needs the right licence class. See commercial driving licence.
What do state EV policies give?
By December 2025, 29 states and union territories had notified EV policies. They commonly cover road-tax waivers, registration benefits and purchase incentives, each with its own end date and vehicle limit. Below are only the states whose own government documents we have read.
| State | Benefit | Valid until |
|---|---|---|
| Maharashtra (EV Policy 2025, GR of 23 May 2025) | Full exemption from motor vehicle tax for EVs sold and registered in Maharashtra | 31 Mar 2030 |
| Maharashtra | Purchase incentive of 10% of the ex-factory price: up to ₹10,000 for an e-2W (first 1,00,000 vehicles), up to ₹1,50,000 for a private electric car (first 10,000) | 31 Mar 2030, or when the vehicle limit is reached |
| Maharashtra | No toll for passenger EVs on the Mumbai–Pune Expressway, Samruddhi Mahamarg and Atal Setu | 31 Mar 2030 |
For any other state:
- Open your state transport department's website and look for the current EV policy or tax exemption notification. Note its end date and any limit on the number of vehicles.
- Check the date: most exemptions apply to vehicles registered within the policy period, not bought or booked.
- Ask the dealer for an on-road quotation that shows road tax as zero or reduced, and check it against the notification.
More on how road tax works is in our road tax guide.
Frequently asked questions
Is there a government subsidy on electric cars?
Not from the centre. PM E-DRIVE does not cover private electric cars. Some states give one; Maharashtra, for example, gives up to ₹1,50,000 for the first 10,000 cars.
How much subsidy do I get on an electric scooter?
₹2,500 per kWh of battery, up to ₹5,000, if the model is eligible and its ex-factory price is ₹1.5 lakh or less.
When does PM E-DRIVE end?
31 March 2028 for two-wheelers, e-rickshaws and e-carts, or earlier if the category's fund runs out.
Do I apply for the subsidy after buying?
No. It is deducted from the price at the dealer through an e-voucher after Aadhaar face authentication.
Is GST on electric vehicles 5%?
Yes, on all electric vehicles and on chargers.
Can I still claim section 80EEB?
Only for a loan sanctioned between 1 April 2019 and 31 March 2023. A new loan gets no EV-specific deduction.
What colour is an EV number plate?
Green. Private EVs have white letters on green, and transport EVs have yellow letters on green, under a 2018 Transport Ministry notification.
Do EVs pay road tax?
It depends on the state. The centre has advised states to waive it; each state sets its own rule and end date.
Sources
- PIB – PM E-DRIVE Scheme backgrounder (1 Oct 2026) (accessed 26 Oct 2026)
- PM E-DRIVE – scheme notifications, including S.O. 4424(E) of 10 Aug 2026, the 27 Mar 2026 extension and the 29 Sep 2024 scheme notification (accessed 26 Oct 2026)
- PM E-DRIVE portal – homepage notices and e-voucher (accessed 26 Oct 2026)
- PIB – GST on EVs cut to 5% and on chargers to 5% (27 Jul 2019) (accessed 26 Oct 2026)
- PIB – Roads Reimagined: the rise of India's EV ecosystem (5 Aug 2026) (accessed 26 Oct 2026)
- PIB – FAQs on the 56th GST Council decisions (accessed 26 Oct 2026)
- Income Tax Department – section 80EEB (accessed 26 Oct 2026)
- PIB – battery operated vehicles exempted from registration fees (2 Aug 2021) (accessed 26 Oct 2026)
- PIB – colour of registration mark for battery operated vehicles (10 Aug 2018) (accessed 26 Oct 2026)
- PIB – steps taken to promote EVs, permit exemption and road-tax advisory (28 Mar 2023) (accessed 26 Oct 2026)
- Motor Vehicles Department, Maharashtra – Maharashtra Electric Vehicle Policy 2025 (GR of 23 May 2025) (accessed 26 Oct 2026)
Page history: 26 Oct 2026: first published.