Road Tax Types and How to Calculate your Road Tax in India – Complete Guide 2023

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A guide on the different types of road tax that exist in India and the method of calculating road tax for citizens

The Government of India levies various types of taxes on its citizens for their overall well-being and comfort. Road tax is just one type of the many taxes levied on people in India. This blog gives a brief overview of road tax, its different types, and the method of calculating it.

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What is Road Tax?

As the name suggests, road tax essentially refers to a certain monetary charge that the Indian government is authorised to impose on the people of the country. This tax is collected from Indian citizens in return for the basic essential services that the government provides to the citizens. These include the building of roads and their maintenance, railway tracks, highways, bridges, and more.

This tax is collected by both the Central and the State government and can be collected in several ways. Road tax regulations generally vary between different states in the country. This means that when you travel from one state to another, you are likely to notice a difference in the tax charges and norms.

The Indian Motor Vehicle Taxation Act mandates every person in India to pay road tax to the government at the time of vehicle purchase. Only then the vehicle is permitted to be driven on public roads in the country. In other words, you must pay car tax for the road before using it, hence the concept of road tax in India.

What are the Types of Road Taxes in India?

As mentioned above, road tax is levied by both the central and state governments in India. They levy different types of road taxes, which serve as an essential source of revenue for them to cover the various expenses involved in building and maintaining infrastructure for the citizens.

Road tax is levied on both private and commercial vehicles. The two basic types of road taxes levied on Indians are:

1. Central Government Road Tax:

This type of vehicle road tax is levied by the central government. Examples include central excise customs duty, central sales tax, GST, and other additional cess depending on the category and model of the motor vehicle.

2. State Government Road Tax:

This is the other kind of motor vehicle tax that is charged once annually or for the full lifetime of the motor vehicle. Examples are toll tax, goods and passenger tax, state-specific Value Added Tax or VAT, and more.

Factors Affecting Calculation of Road Tax in India

Each state in India levies a different amount of road tax on its people. The percentage of tax computed is likely to vary from one state to the other. Generally speaking, the computation of road tax takes into account the following factors:

1. Age of the motor vehicle:

A vehicle’s IDV is likely to vary according to its age or how long ago the vehicle model had been manufactured. The road tax would be calculated according to it.

2. Purpose of use:

This factor determines whether the vehicle is being used for personal or commercial reasons. Personal use means purchasing the vehicle for self-use. Commercial use implies buying a vehicle for carrying goods and passengers from one place to another. Commercial vehicle tax is levied on all commercial-use vehicles.

3. Seating capacity:

Road tax computation varies for vehicles that are 5-seaters or 7-seaters.

4. Engine capacity of the vehicle:

Different tax slabs are determined for the capacity of the vehicle’s engine, such as for two-wheelers, three-wheelers, and four-wheelers.

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How is Road Tax Calculated?

The road tax levied varies from one state to another. Each state has its own tax norms and percentage charges for imposing road tax. The simplest way to do a quick road tax check for your vehicle is to use an online road tax calculator, which is easily available for free online.

The calculator would do a quick computation of road tax charges for your vehicle, based on the type of vehicle you own and which state you live in. In case you travel from one state to another, the calculator can still be used to compute the exact charges that would be levied on your vehicle in accordance with the tax norms of that particular state.

Vehicle tax details can be determined by taking into account the following:

1. The price of the vehicle on the invoice

2. The vehicle number

3. The type of vehicle, i.e., two-wheeler, four-wheeler, or electric

4. The date of purchase of the vehicle

5. The type of fuel used in the vehicle – diesel, petrol, CNG, LPG

To give you a better idea of the road tax norms in different states in India, please see the table below:

1. Maharashtra

Weight of the Vehicle Type of Vehicle Amount
<750 kg Rs. 880
>6000 kg but <7500 kg Rs. 3,450
16,500 kg Rs. 8,510
> 16,500 kg Rs. 375 OR 500 gm
Two-seater including driver’s seat Rs. 160 for each seat per year
Six-seater including driver’s seat Rs. 600 for each seat per year

2. Andhra Pradesh

Type of Vehicle Age of the Vehicle <60CC >60CC
Two-wheeler Brand new 9% of the cost price 9% of the cost price
Two-wheeler >4 years but < 5 years 5% of the cost price 5% of the cost price
Two-wheeler >9 years but <10 years 2% of the cost price 2% of the cost price
Two-wheeler >11 years 1% of the cost price 1% of the cost price
Four-wheeler Brand new 12% of the cost price 14% of the cost price
Four-wheeler >4 years but <5 years 9.5% of the cost price 11.5% of the cost price
Four-wheeler >9 years but <10 years 7% of the cost price 9% of the cost price
Four-wheeler >12 years 5.5% of the cost price 7.5% of the cost price

3. Delhi 

Type of Vehicle Up to Rs. 25,000  >Rs. 25,000 but <Rs. 40,000 >Rs. 40,000 but <Rs. 60,000 >Rs. 60,000
Two-wheeler 2% of the cost price 4% of the cost price 6% of the cost price 8% of the cost price

 

Type of Vehicle Up to Rs. 600,000 >Rs. 600,000 but <Rs. 10,00,000 >Rs. 10,00,000
Four-wheeler 4% of the cost price 7% of the cost price 10% of the cost price

4. Tamil Nadu

Age of the Vehicle Cost up to Rs. 10,00,000 Cost >Rs. 10,00,000
Brand new 10% of the cost price 15% of the cost price
>4 years but <5 years 7.75% of the cost price 12.75% of the cost price
>9 years but <10 years 6.5% of the cost price 11.5% of the cost price
>11 years 6% of the cost price 11% of the cost price

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Summing Up

Payment of road tax is vital for every vehicle owner. The good news is that online road tax payment is possible to make the entire process seamless and hassle-free for the taxpayer. This blog provides an approximate idea of the different tax norms and slabs applicable in some of the major states of India. However, for a more accurate calculation of road tax in your specific state, use the road tax calculator easily available on PayBima online for free. We also sell a host of reasonably affordable motor insurance plans to our customers. Visit us for more details.

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FAQs: What is Road Tax?

What is Vahan online tax payment?

The government allows its citizens to make online payments on the official portal of www.parivahan.gov.in. You can easily register yourself online on this portal and proceed with tax payment for your vehicle as applicable.

Is RTO online payment possible?

Yes, depending on the state that you reside in, you can initiate a step-by-step online payment for your vehicles on the official portal of your state’s RTO.

Which state pays the highest road tax in India?

Karnataka levies the highest amount of road tax in the country.

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May 31, 2023
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PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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