If you are open to buying an electric vehicle, the Tata Tiago EV is a good option for city use. It's got a smooth powertrain and is much more practical than the MG Comet you also considered. There's also the option of the Tata Punch EV, though it is slightly out of your budget. 

Among petrol automatic cars within your budget, the Hyundai i20 iVT and Citroen C3 AT have the smoothest automatic gearboxes. The Maruti Suzuki Swift AMT is also a good city car, though the AMT gearbox isn't as nice. 
 

Purely from a financial point of view, a petrol car will be a sensible option since the daily usage is limited. However, an EV like a MG Comet or Tata Tiago EV, will be far smoother and quieter than any ICE automatic option. So, get an EV only for the superior drive experience.

You're right, those are two very different cars. Since your usage is mostly city driving, an EV like the Tata Tiago EV is smooth but limited in space and range. The Mahindra XUV 3XO RevX A Turbo on road price is above your budget, and it has limited boot space.

We recommend the Hyundai i20, which is comfortably within your budget. It offers two great  petrol engines (1.2 MPI and 1.0 T-GDI) with two smooth automatic gearboxes (CVT and DCT), good features, comfort, and sufficient space for a family of four.

It seems that you drive over 3,000 km per month, which is significant. While a small EV like the Tata Tiago EV or Tata Punch EV would help offset high fuel costs, they may not be the best for frequent highway drives. Instead, the Maruti Swift stands out for its excellent fuel efficiency. The Hyundai Grand i10 Nios is another good option. To further reduce running costs, consider the CNG variants of these models.