Rules & Regulations to Road Tax in India
It is a compulsory tax to be paid by an individual purchasing a vehicle. The Road Tax is a state level tax, i.e., the government of various states impose it at their individual level. Each state has different rules and regulations for charging the road tax. Due to the varying percentage levied by different states, the amount of tax is also different. According to the Central Motor Vehicles Act, if a car is being used for more than a year, then it is compulsory to pay the whole amount of road tax at once.
Who levies Road Tax?
Road Tax is levied on all two-wheeler, four-wheeler, and other types of vehicles used for both private and commercial purposes. The road tax is imposed by –
- The State Government who levies yearly or lifetime motor vehicles tax, passenger and goods tax, state vat, and toll tax.
- The Central Government which levies customs duty, central excise, central sales tax, GST and other additional cess based on the model and type of the vehicle.
Why is Road Tax A State Level Tax?
Other than national highways which are constructed and maintained by the Central Government, about 80% of the roads in all the states of India are constructed by the respective state government. Since the cost of construction of these roads is borne by each state, the road tax is essentially imposed by the respective state government.
Who has to pay the Road Tax?
Individuals purchasing a vehicle pay the road tax which is based on the ex-showroom price of the vehicle. The calculation of road tax depends on these following things:
- Seating capacity of the vehicle
- Engine capacity of the vehicle
- Age of the vehicle
- Weight of the Vehicle
When to pay road tax?
During the registration of a vehicle, an individual is required to pay the road tax. Based on the various criteria of different state governments, the road tax payment is made either annually or all at once. If you purchase a car in one state and pay a lifetime road tax, and then wish to use it in another state if you are shifting your residence, then you will be required to re-register the car in the new state and pay the road tax again. You are not required to pay road tax again if you are just visiting another state.
Where to pay the road tax?
The Road Tax is paid at the Regional Transport Office, i.e. RTO.
How to pay the road tax?
- Offline MethodThe showroom or the automobile dealer is the one who makes the initial payment of road tax for a vehicle. Once the validity period of the first payment is over, the vehicle owner has to visit an RTO near his/her location, fill up the road tax form with personal details, and deposit the tax amount by cash or demand draft.
- Online methodIndividuals can also opt to pay the road tax online by visiting the Transport Department website of the state where the vehicle was purchased. To pay the road tax online, a vehicle owner has to enter the Vehicle Registration Number and the Chassis number and then submit it. In the next step, he/she has to select the mode of payment of tax and complete the payment process.
How to get Road Tax refund?
To discard a vehicle which is not more than 15 years old, a car owner needs to cancel the registration of that particular vehicle by visiting the RTO in which the vehicle was registered. However, if the vehicle has been transferred from one state to another, then the refund has to be claimed by visiting the RTO in which the initial registration was done. To cancel the registration, submit an imprint of the chassis/engine number along with the required documents at the RTO.
Rules and regulations for a few states of India
- Karnataka
The rules and regulations for road tax in Karnataka is based on the Karnataka Motor Vehicles Rules, 1989. Some of the important information regarding the rules and regulation of Road tax for Karnataka is given below.
Tax Percentage
The tax percentage for private and non-commercial vehicles are as follows:
| Age of the Vehicle | 2-wheelers less than Rs.50,000 | 2-wheelers more than Rs.50,000 but less than Rs.1 lakh | 2-wheelers more than Rs.1 lakh | Electric vehicles (2-wheelers) |
| New Vehicles | 10% of vehicle’s cost | 12% of the vehicle’s cost | 18% of the vehicle’s cost | 4% of the vehicle’s cost |
| Not more than 5 years | 75% | 75% | 75% | 75% |
| More than15 years | 25% | 25% | 25% | 25% |
For 4-wheelers:
| Age of the vehicle | 4-wheelers less than Rs.5 lakh | 4-wheelers more than Rs.5 lakh but less than Rs.10 lakh | 4-wheelers more than Rs.10 lakh but less than Rs.20 lakh | 4-wheelers more than Rs.20 lakhs | Electric Vehicle (4-wheelers) |
| New | 13% of the vehicle’s cost | 14% of the vehicle’s cost | 17% of vehicle’s cost | 18% of the vehicle’s cost | None |
| More than 4 years but less than 5 years | 75% | 75% | 75% | 75% | 75% |
| More than 15 years | 25% | 25% | 25% | 25% | 25% |
Life Time Tax Payment
For vehicle owners whose vehicles are being used in Karnataka for more than one year but have registration number of other states, they have to pay the lifetime tax again. The tax is not applicable for only those outstation vehicles that are operating in Karnataka for less than one year.
Levy of Tax
The Karnataka state government levies road tax on all the vehicles including 2, 3, and 4-wheelers which are sold to be used on the road. The state transport department website mentions all the rates that can be applied to such vehicles in different sections of the motor vehicle taxation schedule.
Payment of Tax
The vehicle owner can choose to pay the tax levied under section 3 in advance either on quarterly, half-yearly, or yearly basis within 15 days of the chosen period. Either the owner of the vehicle or the person who is currently in possession of the vehicle can make the payment.
Taxation Card
When a vehicle owner has paid the tax levied under section 3, the taxation authority issues the following to the person paying the tax,—
- A receipt mentioning the amount of tax paid.
- A taxation card mentioning the rate of tax that has been levied and the period for which the person has paid the road tax.
Note – Unless the registered owner or the person who is in possession of the vehicle for which road tax has been paid under section 3 has obtained a taxation card under sub-section 1, no one can use the vehicle. Moreover, a vehicle for which the road tax is due or the taxation card has not been assigned cannot be used in any public place or road.
- Delhi
The rules and regulations for road tax in Delhi are based on the Delhi Motor Vehicle Taxation Act, 1962. Some of the important information regarding the rules and regulation of Road tax for Delhi is given below.
Tax Percentage
The tax percentage for private or non-commercial vehicles are as follows:
For 2-wheelers:
| 2-wheelers up to Rs.25,000 | 2-wheelers more than Rs.25,000 and up to Rs.40,000< | 2-wheelers more than Rs.40,000 and up to Rs.60,000 | 2-wheelers more than Rs.60,000 |
| 2% of the vehicle’s cost | 4% of the vehicle’s cost | 6% of the vehicle’s cost | 8% of the vehicle’s cost |
For 4-wheelers:
| 4-wheelers up to Rs.6 lakh | 4-wheelers more than Rs.6 lakh but less than Rs.10 lakh | 4-wheelers more than Rs.10 lakh |
| 4% of the vehicle’s cost | 7% of the vehicle’s cost | 10% of the vehicle’s cost |
Life Time Tax Payment
The road tax for private or non-commercial vehicles is paid once, but for commercial and passenger vehicles, the road tax can be paid on monthly, yearly and half-yearly basis.
Levy of Tax
As per the Delhi Motor Vehicle Taxation Act, all commercial and non-commercial vehicles that are kept and used in Delhi have to pay the road tax. The road tax is levied based on the following factors:
- If the vehicle registration is done in Delhi, then a one-time payment has to be made depending on the category and cost of the vehicle.
- If the vehicle is registered in any state other than Delhi, then a one-time tax is levied deducting one-tenth of the tax amount paid each year after the registration was done in that other state.
If the motor vehicles are more than 10 years old, the owner of the vehicle can apply to the taxation authority for a certificate that states the age of the vehicle. Under the Delhi Motor Vehicle Taxation Act, vehicles that are more than 10 years old do not attract any road tax.
Payment of Tax
The registered owner or person who has possession of the vehicle has to fill a declaration form stating the particulars of the vehicle and its use in Delhi. The individual has to submit the form to the taxation authority after that. The car owner has to pay the tax according to the rate mentioned in the Taxation Act.
Taxation Card
After the car owner has paid the tax that has been levied on his/her vehicle under section 3 of the Taxation Act, the taxation authority will issue a receipt which mentions the period for which the tax has been paid (if any). The certificate of registration will also mention the taxation period and whether or not the registration has been granted in respect of the vehicle under the Motor Vehicle Act.
Note – The vehicle which is liable to tax under the Motor Vehicle Act cannot be kept or used in Delhi unless the owner has a valid taxation card displayed on the vehicle.
- Maharashtra
The rules and regulations for road tax in Maharashtra is based on The Maharashtra Motor Vehicles Taxation Act, 1958. Some of the important information regarding the rules and regulation of Road tax for Maharashtra is given below.
Tax Percentage
If the motor vehicle is registered within the state, then the tax rate is determined by the taxation authority after all the information furnished in the application for registration is verified. After that, the taxation authority provides the car owner with the certificate of taxation. Some of the most important factors that determine the tax are:
- Age of the vehicle
- Manufacturer of such vehicle
- Fuel type, i.e. petrol or diesel
- The length and width of the vehicle
- Seating capacity
- Number of wheels of the vehicle
- Engine capacity
There are a number of schedules for calculating the tax. Such as,
- Schedule A (III) calculates the rate according to the weight of the vehicle.
| Weight of Vehicle | Amount (Rs.) |
| Less than 750 kg | 880 |
| More than 6000 kg but less than 7500 kg | 3450 |
| 16,500 kg | 8510 |
| Above 16,500kg | 375/500gm |
- Schedule A (IV) (1) calculates the rate according to the type of the vehicle
| Type of Vehicle | Amount (Rs.) |
| 2 seaters including driver | 160 per seat/per year |
| 6 seaters including driver | 600 per seat/per year |
- Schedule A (IV) (3) (A) calculates the tax based on the interstate route.
- Schedule A (IV) (4) calculates the special permit vehicle covered under Central Motor Vehicles Act
- Schedule A (VIII) calculates the tax for transport of goods excluding for agricultural purposes.
Payment of Tax
The car owner can choose to pay tax in advance in the following way –
- Annually
- For each quarter, at one -fourth of the annual rate
- For more than one quarter, at multiples of the quarterly rate
- For any period less than a quarter expiring on the last day of the quarter
- At the rate of one-twelfth of the annual rate of tax plus 20%, thereof where the period does not exceed one calendar month
- At 1/6th of the annual rate of tax plus 15% at the quarterly rate
The road tax has to be paid within the first one month of the vehicle registration to the taxation authority in whose jurisdiction the vehicle has been registered. The car owner can pay the tax in any of the following modes:
- Cash
- DD
- Cheque
Refund Procedure
If a car owner claims a refund, he/she has to submit an application to the authority mentioning the relevant cause for such claim. He/she also has to produce a certificate of taxation along with the application. However, the application will be rejected if the claim is made after 6 months from the date:
- As mentioned on the “certificate of non-use†of the vehicle.
- Expiry, suspension, or cancellation of the certificate of registration of the vehicle.
An individual can also ask for a refund if the vehicle is permanently discarded or it has been transferred to another state.
The taxation authority calculates the amount of refund after the vehicle owner submits the application. Along with the refund amount, the owner is also provided with a certificate of the refund. Moreover, the certificate of taxation is also returned to the car owner once the authority has entered the details of the refund that has been paid to the owner.
Issue Of Taxation Card
A taxation card is issued by the respective authority when the vehicle owner has paid the amount according to the rate of tax. The taxation authority provides the vehicle owner with a receipt mentioning the details of the tax that has been paid. The taxation certificate also includes the rate of tax and the period for which the tax has been paid.
- Tamil Nadu
The rules and regulations for road tax in Tamil Nadu is based on The Tamil Nadu Motor Vehicle Taxation Act, 1974. Some of the important information regarding the rules and regulation of Road tax for Tamil Nadu is given below.
Tax Percentage
| Age of the Vehicle | Cost of the vehicle less than Rs.10 lakh | Cost of the vehicle more than Rs.10 lakh |
| New | 10% of the cost of the vehicle | 15% of the cost of the vehicle |
| More than 4 years but less than 5 years | 7.75% of the cost of vehicle | 12.75% of the cost of vehicle |
| More than 9 years but less than 10 years | 6.50% of the cost of vehicle | 11.50% of the cost of vehicle |
| More than 11 years | 6% of the cost of vehicle | 11% of the cost of vehicle |
Payment Of Tax
The tax levied under the Tamil Nadu Motor Vehicle Taxation Act is paid by the registered owner or by an individual having possession or control of the motor vehicle in any of the following ways
- Quarterly
- Half-yearly
- Annually
The payment of tax depends on the licence of the owner, i.e., whether the validity of the licence is for that quarter, half-year or year.
The tax for a half-yearly licence cannot exceed twice the amount of tax for a quarterly licence and the tax for an annual licence cannot exceed 4 times the amount for the same quarterly one. Motor vehicles that do not have a licence in Tamil Nadu cannot be used within the state. Moreover, no person can pay the tax for a vehicle during any period the tax due in respect of such vehicle has already been paid by someone else.
Levy of Tax
The tax levied on motor vehicles used or kept for use in the state of Tami Nadu are in accordance with the rate specified for such vehicle in the 1st, 2nd, 3rd, or 5th schedule. The state government has the power to change the rate of tax levied on the motor vehicles by notification from time to time.
- Andhra Pradesh
The rules and regulations for road tax in Andhra Pradesh is based on The Andhra Pradesh Motor Vehicles Taxation Act, 1963. Some of the important information regarding the rules and regulation of Road tax for Andhra Pradesh is given below.
Tax Percentage
For 2-wheelers
| Age of the Vehicle | 2-wheelers not exceeding 60 cc | 2-wheelers exceeding 60 cc |
| New | 9% of the cost of the vehicle | 9% of the cost of the vehicle |
| More than 4 years but less than 5 years | 5% of the cost of the vehicle | 5% of the cost of the vehicle |
| More than 9 years but less than 10 years | 2% of the cost of the vehicle | 2% of the cost of the vehicle |
| More than 11 years | 1% of the cost of the vehicle | 1% of the cost of the vehicle |
For 4-wheelers
| Age of the Vehicle | 4-wheelers less than Rs.10 lakh | 4-wheelers more than Rs.10 lakh |
| New | 12% of the cost of the vehicle | 14% of the cost of the vehicle |
| More than 4 years but less than 5 years | 9.5% of the cost of the vehicle | 11.5% of the cost of the vehicle |
| More than 9 years but less than 10 years | 7% of the cost of the vehicle | 9% of the cost of the vehicle |
| More than 12 years | 5.5% of the cost of the vehicle | 7.5% of the cost of the vehicle |
Levy of tax
The government has the authority to direct the tax that should be imposed on a motor vehicle used with the state of Andhra Pradesh. The tax levied on a vehicle is based on the class of motor vehicle. The car owner is required to pay the tax within 7 days of the purchase of the vehicle. For electric, battery, or solar powered vehicles no tax is levied for a period of 5 years.
Payment of tax
The tax levied under Andhra Pradesh Motor Vehicles Taxation Act, 1963 is required to be paid by the registered owner of the vehicle or any other individual having possession of the vehicle in advance. The individual can choose the way he/she wants to pay the tax. He/she can choose to pay either quarterly, half-yearly, or annually depending on his/her licence for that quarter, half-yearly, or year.
The payment of tax has to be made to the licensing officer in the form of a demand draft.
information credit : bankbazzar
