Budget 2020: Toyota seeks scrappage policy, income tax relief on vehicles

New Delhi: Toyota Kirloskar Motor (TKM) on Monday urged the government to come out with a scrappage policy for old vehicles ahead of the Budget, while also seeking to extend income tax benefits available for electric cars to other vehicles as well.

“We would like the Budget to spur demand without putting any additional burden on the government exchequer; one way to achieve this is by realising the scrappage policy for all old vehicles, the draft policy of which has been shared by the government,” TKM Senior Vice-President (Sales & Services) Naveen Soni said in a statement.

The auto industry is willing to share its portion towards realising such scrappage policy, which will eventually have a more sustainable impact on the environment, he added.

Additionally, another thrust area would be to extend the income tax benefits available for electric cars to other vehicles as well, or to extend the depreciation benefit currently available only to companies and professionals to personal customers also, Soni said.

“This kind of stimulus will not have a significant impact on the government revenues in the immediate future while it can effectively improve consumer sentiment and help pull forward demand during the difficult period of BS-VI transition that will see prices of most vehicles go up,” he added.

These purely temporary measures could help lead a phased improvement in the overall sentiments and revival of demand, Soni noted.

While presenting the Budget for 2019-20, the finance minister had proposed to provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles as part of efforts to accelerate the adoption of eco-friendly mobility solutions.