After the Finance Minister of India, Arun Jaitley announced the 2016 Budget, new cars will become expensive. There will be an increase in taxes on all new cars, from the entry-level ones to the super luxury cars.
According to the new budget, there will be a 1 percent increase on all cars and and an additional 2.5 percent tax on all diesel vehicles, regardless their capacities. There will be a 1 percent luxury tax on all cars above Rs. 10 lakh, and SUVs will bear a 4 percent 'high capacity' tax.
With the implementation of high capacity tax and diesel vehicle tax, carmakers such as Mahindra and Toyota will be the most affected since most of their best-selling vehicles are diesel powered ones, and are SUVs.
Apart from the tax increment, the government has also set aside Rs. 97,000 crore for infrastructure for the roads and highways. Out of this total amount, Rs. 55,000 crore is allocated for road and highways alone.