Rules & Regulations for Road Tax in India

1. Proof of Address and Personal ID Proof of Vehicle Invoice

What is the Reason for Imposing Road Tax on Buyers?

India boasts one of the world's most extensive road networks, spanning a total distance of over 5.898 million kilometres across the nation. To uphold the infrastructure of this vast expanse of roads and provide essential amenities such as street lighting and road signage, the Indian government recuperates expenses through a tax imposed on vehicle proprietors within the country. 

The funds accumulated are also channelled towards implementing safety measures and providing immediate medical aid in the event of on-road accidents that drivers might encounter. Moreover, these funds play a pivotal role in the expansion of the road network, along with the enhancement of highways and expressways, in response to the increasing number of vehicles utilizing the roadways over time. Hence, under Section 39 of the Motor Vehicle Taxation Act 1988, individuals purchasing new vehicles are obligated to remit a designated sum as road tax.

Who levies Road Tax?

Road Tax is levied on all two-wheelers, four-wheelers, and other types of vehicles used for both private and commercial purposes. The road tax is imposed by -

1. The state government levies yearly or lifetime motor vehicles tax, passenger and goods tax, state vat, and toll tax.
2. The central government 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 the following things:

1. Seating capacity of the vehicle
2. Engine capacity of the vehicle
3. Age of the vehicle
4. 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 Can Road Tax be Paid

For individuals purchasing new vehicles, there are two avenues for road tax payment. 

Offline Road Tax Payment: One avenue involves paying the road tax in person at the Regional Transport Office (RTO) during the registration process of your newly acquired vehicle. The dealership can also handle this if they assist with the vehicle's registration. Alternatively, if you have already registered the vehicle, you can personally visit the RTO to fulfil the road tax obligation. 

Online Payment through the Parivahan Website: The Parivahan website offers the convenience of settling your road tax online, right from your residence. To proceed with online road tax payment, adhere to these steps:

1. Visit the official Parivahan website. 
2. Navigate to the 'Online Services' section on the main menu and choose 'Vehicles Related Services'. 

1. You will then be prompted to specify the state and corresponding RTO. 
2. Once the appropriate page loads, furnish the vehicle's registration number and other required details to authenticate the information. 
3. Upon successful verification, you can proceed to make your road tax payment online. 

How to Claim Road Tax Refund in India?

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.

You need to present the following documents while you are claiming a refund: 

1. Request letter for refund 
2. Original or notarized copy of a smart card 

1. Insurance documents 
2. Pollution documents 
3. Chassis imprint 
4. No Objection Certificate from current RTO 
5. Migration proof 

1. Original road tax receipt 
2. RTO Form 16 and DT 
3. CRTI Intimation 

Rules and Regulations for a few States of India

1. 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:

For 2-wheelers:

For 4-wheelers:

Lifetime Tax Payment

For vehicle owners whose vehicles have been used in Karnataka for more than one year but have registration numbers from other states, have to pay the lifetime tax again. The tax is not applicable only to those outstation vehicles that have been operating in Karnataka for less than one year.

Levy of Tax

The Karnataka state government levies road tax on all vehicles including two, three, and four 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 three, the taxation authority issues the following to the person paying the tax,—

1. A receipt mentioning the amount of tax paid.
2. 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.

2. 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 regulations 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:

For 4-wheelers:

Lifetime 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 a 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:

1. If the vehicle registration is done in Delhi, a one-time payment must be made depending on the category and cost of the vehicle.
2. 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 over ten years old, the owner can apply to the taxation authority for a certificate stating their age. Under the Delhi Motor Vehicle Taxation Act, vehicles over ten years old do not attract any road tax.

Payment of Tax

The registered owner or person who has possession of the vehicle must fill out a declaration form stating the vehicle's particulars and its use in Delhi. The individual must 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.

3. Maharashtra

The rules and regulations for road tax in Maharashtra are 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 a certificate of taxation. Some of the most important factors that determine the tax are:

1. Age of the vehicle
2. Manufacturer of such vehicle
3. Fuel type, i.e. petrol or diesel
4. The length and width of the vehicle
5. Seating capacity
6. Number of wheels of the vehicle
7. Engine capacity

There are several schedules for calculating the tax. Such as,

1. Schedule A (III) calculates the rate according to the weight of the vehicle.

1. Schedule A (IV) (1) calculates the rate according to the type of the vehicle

1. Schedule A (IV) (3) (A) calculates the tax based on the interstate route.
2. Schedule A (IV) (4) calculates the special permit vehicle covered under Central Motor Vehicles Act
3. Schedule A (VIII) calculates the tax for the transport of goods excluding agricultural purposes.

Payment of Tax

The car owner can choose to pay tax in advance in the following way -

1. Annually
2. For each quarter, at one-fourth of the annual rate
3. For more than one quarter, at multiples of the quarterly rate
4. For any period less than a quarter expiring on the last day of the quarter
5. At the rate of one-twelfth of the annual rate of tax plus 20%, thereof where the period does not exceed one calendar month
6. At 1/6th of the annual rate of tax plus 15% at the quarterly rate

The road tax must be paid within the first 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:

1. Cash
2. Demand Draft (DD)
3. Cheque

Refund Procedure

If a car owner claims a refund, he/she must apply to the authority mentioning the relevant cause for such a claim. He/she must also produce a certificate of taxation along with the application. However, the application will be rejected if the claim is made after six months from the date:

1. As mentioned on the "certificate of non-use" of the vehicle.
2. 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.

4. Tamil Nadu

The rules and regulations for road tax in Tamil Nadu are 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

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

1. Quarterly
2. Half-yearly
3. 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 four 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 Tamil Nadu is in accordance with the rate specified for such vehicle in the first, second, third, or fifth schedule. The state government has the power to change the rate of tax levied on motor vehicles by notification from time to time.

5. Andhra Pradesh

The rules and regulations for road tax in Andhra Pradesh are 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

For 4-wheelers

Levy of tax

The government has the authority to direct the tax that should be imposed on a motor vehicle used by 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 seven days of the purchase of the vehicle. For electric, battery, or solar-powered vehicles no tax is levied for a period of five 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.

Is There a Penalty for Not Paying Road Taxes in India? 

The people who fail to pay taxes on time have to pay a fine. The government will charge the penalty by considering the following things: 

1. Tax amount payable for the vehicle for two quarters for first offenders. 
2. For serial offenders, the fine will be equal to or less than the annual tax of the vehicle which will be extended twice a year. 
3. The defaulters have to pay fines for more than Rs.300 which will be extended one-time annual tax. This fine will be more than Rs.500 and will be charged twice a year in case of serial offenders. 

Is Road Tax Different for Different Vehicle Types? 

The RTO will collect the road tax for a vehicle on the basis of the following factors: 

1. State where the vehicle is registered 
2. Seating capacity of the vehicle 
3. Engine capacity of the vehicle 

1. Age of the vehicle 
2. Weight 
3. Fuel type 
4. Purchase and registration date 
5. Vehicle class and usage