Union Budget 2016: How much extra would you have to pay for a new car?

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Finance Minister Arun Jaitley presented the Union Budget 2016-17 where he presented new tax structures on different segment of vehicles. In this calendar year’s budget, Jaitley announced an infrastructure cess of up to 4% on passenger vehicles such as cars, SUVs and luxury cars. Moreover, luxury and small cars further had their own woes. According to the new budget, small vehicles would attract a cess of 1% while vehicles with higher engine displacement (read luxury cars and SUVs) will attract a cess of 4%. Apart from that, a cess of 2.5% is also proposed on diesel vehicles.

2015 Mahindra XUV500 vs 2015 Tata Safari (15)

So how exactly would the new tax structure impact the manufacturer and finally you?

We calculated the estimated rise in the prices of vehicles from different segments based on the new tax structure and this is what you can expect to see in terms of expected price hike. Note: Figures considered are the ex-showroom Delhi prices of the top of the line variants:

Make/Model Expected Hike in INR
Maruti Swift INR 5,000-9,000
Renault Kwid INR 3,000-6,000
Hyunida i20 INR 5,000-15,000
Volkswagen Polo INR 5,000-15,000
Mahindra XUV5OO INR 40,000-50,000
Tata Safari INR 40,000-50,000
Ford EcoSport INR 35,000-50,000
Renault SUV INR 35,000-50,000
Luxury cars
Audi A8 INR 4,50,000-6,00,000
BMW 7-Series INR 4,50,000-6,00,000
Mercedes S-Class INR 4,50,000-6,00,000
Volvo S60 INR 1,50,000-3,00,000

New Hyundai i20 Active side by side(181)

Those are the estimated price hikes that we expect the manufacturers to levy on their products. Mercedes-Benz India has already announced a price hike for its entire product range with new tags to vary by 3-5%. We expect the rest of the manufacturers to announce price hikes for their respective products in the coming days.

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