Find your suitable insurance plan
1138
6 min read
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.
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.
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:
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.
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.
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:
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.
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.
Road tax computation varies for vehicles that are 5-seaters or 7-seaters.
Different tax slabs are determined for the capacity of the vehicle’s engine, such as for two-wheelers, three-wheelers, and four-wheelers.
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:
| 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 |
| 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 |
| 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 |
| 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 |
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.
Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.
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.
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.
Karnataka levies the highest amount of road tax in the country.
PayBima Team
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.
We know that a driving license (DL) is a mandatory requirement for driving a vehicle in India. Also, we know that driving a motor vehicle.
Apr 03, 2024
6 min read 
We all know that a driving license (DL) is necessary to drive a vehicle on the road. The Motor Vehicle Act of 1988 makes it.
Apr 01, 2024 6 min read 
Anyone willing to ride/operate a two-wheeler on the highways in India must acquire a driving license. There are several types of driving licenses for different.
Feb 13, 2024 6 min read 
Indians have been paying GST, or Goods and Service Tax, since the GST Act was introduced and was made effective in India in July 2017..
Jan 04, 2024 6 min read 
There are specific rules followed in India regarding driving a car on the road. To carry a valid driving licence (DL) is one such mandatory.
Nov 09, 2023 6 min read 
It is obligatory to carry a list of vehicle documents while driving, especially when traveling across cities. With ordinary paper documents, one might fail to.
Sep 28, 2023 6 min read 
Updated on Jan 11, 2024 When Shalini was planning to buy a car for herself, she needed to apply for a DL or driving license.
Sep 25, 2023 6 min read 
The thrill of purchasing your first bike is exhilarating. However, before the engine roars and you begin your journey to the open roads that await,.
Jul 27, 2023 6 min read 
Fitness Certificate, commonly called as FC is a document that confirms the fitness of a vehicle. This certificate ensures that the vehicle is fit to.
Jun 14, 2023 6 min read 
Fitness is crucial not only for human beings but also for vehicles plying on roads. According to the Motor Vehicles Act, 1989, every vehicle is.
Jun 05, 2023 6 min read Mahindra Insurance Brokers Limited (A Mahindra Group Company) - Unit-202, A-Wing, 2nd Floor, Amiti Building, Agastya Corporate Park, Kamani Junction, LBS Marg, Kurla West, Mumbai - 400070. Tel: +91 22 66423800
Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).
Insurance is the subject matter of solicitation.
For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.
Copyright © 2024 Mahindra Insurance Brokers. All Right Reserved.
Get A Call Back