Rules and Regulations to Road Tax in India

Road Tax is a mandatory tax that must be paid while purchasing a vehicle. The Road Tax is imposed by the state to an individual who relocates from a different state. Each state has distinct rules for charges for road tax. Due to the different charges that are levied by various states, the amount of tax chargeable also varies. According to the Central Motor Vehicles Act, 1989 if a car is used at least for a year, then the road tax must be paid by the vehicle owner.

Who Charges the Road Tax?

Road tax is levied on all types of vehicles for private and commercial purposes. Road tax is imposed by:

• State government levies yearly/lifetime vehicles tax, goods tax, toll tax, and state VAT.

• Central Government levies customs duty, central excise, central sales tax, GST and other types of cesses on the vehicle type.

Why Is the Road Tax A State Level Tax?

About 80% of the roads in India are constructed and maintained by the state government. Because the cost of construction is borne by the state government, the road tax is also collected by the state government of the respective states.

Who Should Pay the Road Tax?

People who are buying a vehicle pay road tax which is based on the showroom price of the vehicle. The calculation of road tax depends on the following factors:

• A vehicle's seating capacity

• Engine Capacity

• Weight of the vehicle

• Vehicle's Age

When Can You Pay Road Tax?

An individual is needed to pay the road tax during the vehicle's registration. The road tax is either paid annually or at once depending on the method adopted by the respective state government. If you have bought a car and you wish to use the vehicle in a different state, then you will be required to pay the road tax in that region. You will be required to re-register your vehicle and pay your road tax again. If you are visiting/passing through a state, then you aren't required to pay a road tax.

Where Do You need to pay Road Tax?

The road tax needs to be paid to the regional RTO.

How Can You Pay the Road Tax?

Offline Method

The showroom or the dealer of the vehicle makes the initial payment of the road tax. After the validity period is over, the vehicle owner will be required to visit the RTO, fill up the road tax form with all their details and deposit the tax amount through DD or cash.

The generic documents that an individual needs to produce to complete the payment of road-tax are:

• Registration Certificate

• Insurance Certificate

• Address Proof in india

• Invoice of the purchase

Online Method

Vehicle owners can also opt for making the payment through online mode. You can follow these steps described below to make the online payment of road tax complete:

• Visit the website of the transport department of the state in which the vehicle was purchased.

• Enter the vehicle number and chassis number.

• Click on Submit.

• Select the mode of payment for the road-tax and complete the payment process.

How to Get a Refund on the Road Tax?

To discard a car which is not less than 15 years old, the owner is required to de-register the vehicle by visiting the RTO where it was registered. But, if the vehicle was transferred from one state to another, then the refund can be claimed only from the RTO where the initial registration was done. To cancel the registration, you will be required to submit imprint of the chassis/engine number and the necessary documents at the RTO.

Rules and Regulations Linked with Road Tax Refund in India

Karnataka

The rules and regulations for road tax in Karnataka is based on the Karnataka Motor Vehicles Rules. The essential rules and regulations linked with the road tax in Karnataka are given below:

Tax Percentage

Tax Percentage for a private non-commercial vehicle is described below:

For two-wheelers

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 the 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 than 15 years	25%	25%	25%	25%

For four-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 the vehicle’s cost	18% of the vehicle’s cost	NULL
More than 4 years but less than 5 years	75%	india75%	75%	75%	75%
More than 15 years	25%	25%	25%	25%	25%

Lifetime tax Payment

For the vehicle owners whose vehicles have been running in Karnataka for more than a year and the registration numbers are of a different state, they'll be required to pay the lifetime tax again. This tax isn't applicable to the vehicles that have been operating in the state for less than a year.

Levy of Tax

The state government of Karnataka levies the tax on all the types of vehicles including two, three and four wheelers. It applies to all the vehicles in different sections of the Motor Vehicle Taxation schedule.

Tax Payment

The vehicle owner can choose to pay their taxes in advance under Section 3 either quarterly, monthly or yearly basis within 15 days of the chosen period. Either the vehicle owner or the person in possession of the vehicle can make the payment to the RTO.

Taxation Card

The following documents are issued to the vehicle owner after they have made the payment under Section 3:

• Receipt showing the amount paid by the individual.

• Tax card which mentions the tax rate which has been levied on the taxpayer.

Delhi

The rules and regulations of road tax in Delhi are based on Delhi Motor Vehicle Taxation Act, 1962. Some vital information linked with the rules and regulations for the road tax in Delhi are listed below:

Tax Percentage

The tax percentage for private and non-commercial vehicles in Delhi are described below:

For two-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 four-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 a private and non-commercial vehicle is paid once, but the road tax for commercial and passenger vehicles can be paid on a monthly, bi-annual or annual basis.

Levy of Tax

According to the Delhi Motor Vehicle Taxation Act, all the commercial and non-commercial vehicles in Delhi have to pay the road tax. Road tax levied on these vehicles is based on the following factors:

• One-time payment should be made in a Delhi RTO for private vehicles if the vehicle has been purchased in Delhi

• If the vehicle has been purchased in a different state, the total tax levied is one-time after deducting one-tenth of the tax paid after registration annually in the state where the vehicle was registered.

• If the vehicle is more than ten years old, then the vehicle owner can get a certificate from the tax authority which states the age of the vehicle. Since vehicles under the Delhi Motor Vehicle Taxation Act, vehicles that are more than 10 years old, don't attract any tax.

Payment of Tax

The registered owner of the vehicle or the person in possession of the vehicle will be required to submit a declaration stating that the vehicle was purchased in Delhi and the particulars of the vehicle. The individual is required to submit the declaration to the taxation authority.

Taxation Card

After payment of the necessary tax, the vehicle owner will be issued a receipt that mentions the period for which the tax was paid. The registration certificate that is issued on the individual's name also states the taxation period and whether the registration has been granted according to the Motor Vehicle Act.

Maharashtra

The rules for road tax in Maharashtra are based on the Maharashtra Motor Vehicles Taxation Act 1958. Important information linked with the rules of road tax in Maharashtra is given below:

Tax Percentage

The tax rate for any vehicle is determined by the information furnished by the vehicle owner in the registration application. After the information has been verified, the tax authority provides the vehicle owner with the taxation certificate. Some of the essential factors that determine tax are:

• Age of Vehicle

• Fuel Type

• Length and width of the vehicle

• Seating capacity

• Engine capacity

• Number of wheels in the vehicle

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

• Schedule A (II) calculates the tax rate depending on 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) (3) (A) calculates the tax rate depending on the domestic route.

• Schedule A (IV) (4) estimates the special permit vehicle covered under the Central Motor Vehicles Act.

• Schedule A (I) calculates the taxes based on the type of 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 (VIII) measures the tax for transporting goods and other agricultural products.

Payment of Tax

The vehicle owner can make the payment in advance annually, bi-annually, quarterly, at one-twelfth of the annual rate, at one-sixth of the annual rate.

The road tax must be paid within the first month of registration to the tax authority under whose jurisdiction the vehicle has been registered. the vehicle owner can make the payment through cash, cheque or DD.

Refund Procedure

If a car owner claims a refund of taxes, they need to submit an application to the tax authorities mentioning the relevant details of the vehicle and cause for the claim. They also need to produce a taxation certificate with the application. But the application will be rejected if the claim has been made six months after the date of registration.

An individual can ask for a tax refund only when the vehicle has been entirely discarded or has been transferred to a different state.

The tax authority calculates the amount of refund after the owner of the vehicle has submitted the application. The owner is provided a certificate of refund along with the refund amount. The certificate of taxation is also returned to the vehicle owner after the refund has been credited to the owner.

Issue of Taxation Card

A taxation card is dispensed by the particular authority after the vehicle owner has paid the tax amount according to the tax rate. The taxation authority renders a receipt of the tax amount paid. Taxation certificate also involves information such as the rate of tax and the amount of tax deducted.

Tamil Nadu

The regulations for road tax in Tamilnadu is based on the Tamilnadu motor vehicle taxation act, 1974. some of the important information linked with the rules and regulations of road tax for Tamilnadu is described 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 the vehicle	12.75% of the cost of the vehicle
More than 9 years but less than 10 years	6.50% of the cost of the vehicle	11.50% of the cost of the vehicle
More than 11 years	6% of the cost of the vehicle	11% of the cost of the vehicle

Payment of Tax

The tax levied under the Tamilnadu Motor Vehicle Taxation Act is paid by the registered owner to the individual who is in possession of the vehicle yearly, half-yearly or monthly.

The payment of these taxes depends on the owner's license.

Vehicles who don't have a license in Tamilnadu can't be used in the state. Also, no person can pay taxes for a period in which the taxes have already been paid by someone else.

Levy of Tax

Tax levied on the vehicles that are used or kept in Tamilnadu are according to the rate specified for such vehicles under the 1st, 2nd, 3rd and 5th schedule of the act. the Karnataka state government has the power to change the tax rate that is levied on the vehicle by notifying the vehicle owners from time to time.

Andhra Pradesh

The rules for the road tax levied in Andhra Pradesh is based on Andhra Pradesh Motor Vehicles Taxation Act. Important information linked with the road tax are listed 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 four-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

Payment of Tax

The tax that is levied under the Andhra Pradesh Motor Vehicle Taxation Act is paid by the vehicle owner or the individual who is in possession of the vehicle quarterly, half-yearly or annually.

The amount of tax paid depends on the validity of the license held by the vehicle owner.

Vehicles that aren't registered in Andhra Pradesh are not allowed to operate on the roads unless the owner has paid the road tax.

Levy of Tax

The tax amount that is levied on the vehicles in Andhra Pradesh is as per the rate which is specified for the vehicle under the 1st, 2nd, 3rd or the 5th schedule. The state government has the authority to change the rules and regulations linked to traffic.