Karnataka Ends EV Tax Breaks, Except for 2-Wheelers
Government official stamps a document as citizens wait, a blurred EV charging station visible outside.
Key Highlights
Karnataka revokes EV tax exemptions under the 2026 Amendment Act, excluding two-wheelers. New lifetime road tax applies based on vehicle cost. Read more!
The Karnataka government has officially enacted the Karnataka Motor Vehicles Taxation (Amendment) Act, 2026, which eliminates previous tax exemptions for electric vehicles. This change introduces a lifetime road tax for EVs, a sector that was formerly exempt.
While the amendment affects electric cars, jeeps, buses, and other private vehicles, electric two-wheelers will continue to be exempt from the tax.
The new tax structure is based on the vehicle’s cost at the time of purchase and is payable upon registration. EVs priced under ₹10 Lakh will be taxed at 5%. Vehicles priced between ₹10-25 Lakh will face an 8% tax, and those above ₹25 Lakh will be taxed at 10%. Previously, all EVs in the state enjoyed a complete road tax exemption, which was introduced in 2016 to encourage EV adoption.
For vehicles pre-registered before the amendment, tax demands will range from 93% to 25% of the total lifetime tax, with the levy decreasing as the vehicle ages.
The government anticipates that the measure will generate approximately ₹250 Cr in additional revenue for the state.
Earlier, several electric car manufacturers had appealed to Karnataka chief minister Siddaramaiah for tax relief, citing concerns that the additional tax burden would make EVs more expensive than their internal combustion engine (ICE) counterparts and potentially hinder EV adoption.
Despite these concerns, EV adoption has been increasing nationwide, spurred by fuel shortages and rising prices that make EVs a more cost-effective alternative. Total EV registrations in the country rose 46% month-on-month in March, reaching nearly 2.8 Lakh units.