Telangana Govt Announces Tax Break To Electric Vehicles Till 2026

In order to make Hyderabad pollution-free, effective from today, the Telangana government gave 100 percent exemption on road tax and registration fees for electric vehicles (EVs) for purchased and registered vehicles for the next two years, until December 31, 2026.

In its latest order, the government granted exemption to electric two-wheelers, four-wheelers, and commercial passenger vehicles. Other vehicles that were granted exemption included taxis, private cars, electric three-seater auto-rickshaws, electric light goods carriers including three-wheeled goods vehicles, electric tractors and electric buses. 

According to the government notification, the tax exemption will apply for the entire life of the electric vehicles operated by the Telangana State Road Transport Corporation (TSRTC) only, whereas, the TSRTC-operated electric buses are also eligible for exemption, for the entire life of electric vehicles. Whereas buses owned by any industry to transport only their employees and not commercial purpose vehicles, purchased and registered in Telangana are eligible. The tax exemptions are applicable for the initial period of two years up to December 31, 2026. This tax is applicable irrespective of the number of vehicles registered. 

Other states like Delhi have also introduced such offerings like a 10% tax exemption to two-wheeler and four-wheeler electric vehicles, Karnataka offers a 10% exemption on two-wheelers, whereas, Kerela also offers an exemption on two-wheeler and four-wheeler electric vehicles.

According to CEEW, Electric vehicle penetration in Telangana has surged in the financial year (FY) 2024-25, to reach the national average of 6.89%, whereas, electric three-wheelers have seen a 32. 14% in 2024-25 from 15.99% in 2023-24. Whereas, electric four-wheelers have seen the slowest growth reaching with no major change in numbers. On the other hand, the electric two-wheeler has increased from 5.39% in FY2023-24 to 7.44 in 2024-25. These new exemptions are expected to give further impetus to EV adoption in the state.