Finance Minister Nirmala Sitharaman Unveils Budget 2025: Major Tax Cuts on Motorcycles and Electric Vehicles to Benefit Middle Class.

Union Budget 2025 Introduced

Union Finance Minister Nirmala Sitharaman has introduced the budget for 2025. This budget aims to provide relief to the middle class with several important announcements.

Cheaper Electric Vehicles

One of the key highlights is the reduction in costs for electric vehicles. The government has removed the basic customs duty on lithium-ion batteries, which is expected to make electric vehicles more affordable in the near future.

Reduced Custom Duty on Motorcycles

In addition to electric vehicles, the budget also includes a significant reduction in custom duties on motorcycles. The custom duty has been cut by up to 20 percent, which will lead to a decrease in motorcycle prices.

Impact on Motorcycle Manufacturing

The reduction in custom duty is expected to lower input costs for manufacturers, encouraging more export and boosting domestic manufacturing. Most motorcycles are now produced in India, which will further reduce prices.

Details on Tax Cuts

For motorcycles with an engine capacity of 1600 cc, which are manufactured completely abroad, the tax rate has been decreased from 50 percent to 40 percent. For Semi-Knocked Down (SKD) motorcycles, where the engine is made abroad, but the assembly occurs in India, the tax has been reduced from 25 percent to 20 percent. Additionally, for motorcycles that are fully assembled in India but have parts sourced from abroad, the tax has decreased from 15 percent to 10 percent.

Specific Reductions for CBU and SKD Motorcycles

The custom duty for Completely Built Unit (CBU) motorcycles has also seen a significant reduction from 50 percent to 30 percent. Similarly, the tax for SKD motorcycles has been cut from 25 percent to 20 percent, and for Completely Knocked Down (CKD) motorcycles, the tax has been reduced from 15 percent to 10 percent.