Jaagruk Bharat is a private organization offering support for documentation and government scheme access. We are not affiliated with any government body. Official services are available on respective government portals. Our goal is to make processes easier and more accessible for citizens.

Home

Blogs

About Us

Schemes

Services

Road Tax Rules In India: A Practical Guide To Motor Vehicle Taxation & Compliance

Komal Bajpai

Author

Updated: 16-12-2025 at 3:30 PM

If you plan to buy a new vehicle, factor in road tax costs before you finalise the deal, especially under the new vehicle tax in India norms. States often calculate tax as a percentage of the invoice price, and it can significantly impact the on-road cost. Always verify the applicable slabs for your state (especially if you choose lifetime tax vs periodic tax).

Vehicle tax is an obligation placed on vehicle owners by state law. It supports the construction and upkeep of public roads and other means of transportation. This article will educate you in detail about the road tax, how it is calculated, its exemptions, and much more.

What Is Road Tax / Motor Vehicle Tax?

Road Tax in India, or Motor Vehicle Tax, is a tax imposed by each state that vehicle owners must pay. Road Tax helps support state and local road systems and other transportation support systems, and is also required to operate a vehicle legally on a public road. States administer Road Tax through either a 1-time charge at the time of registration (often called "lifetime tax" in certain states) or an ongoing annual/bi-annual assessment based on state policies.

Also Read: Download Meri Sadak App & Register Online Road Complaint

How Is Road Tax Calculated?

Below you’ll find the common bases and step-by-step elements used to calculate road tax and what factors, in combination, define the Road Tax penalty Calculator. Read on to understand what inputs determine the amount you will pay.

1. Vehicle Purchase Price / Invoice Price:

Typically, road tax is calculated as a % of the purchase price, or invoice price, of the vehicle. Different states use different % to calculate road tax...usually between 5% - 15% for standard passenger vehicles and greater than 15% for luxury or high-value vehicles.

2. Engine Size (in cubic centimetres):

Smaller passenger cars or motorcycles are generally taxed based on the cubic centimetre size of the engine (i.e., 50cc - 150cc, 150cc - 350cc and over 350cc) with an increase in tax based on an increase in engine size. The larger the cc size of the engine, the more tax that will be paid.

3. Number of Passengers:

The number of passengers that can be seated in a vehicle will dictate what level of taxation you will fall under, based on the local/municipal taxation boards.

4. Types of Fuel:

In many cases, diesel-powered vehicles will have a higher rate of tax compared to their gasoline counterparts; however, some states also have lower tax rates for CNG (Compressed Natural Gas) and electric-powered vehicles.

5. Used Vehicles and Depreciated Value:

Used vehicles may be taxed based on a depreciated value as opposed to a fair market value; some states may provide a schedule of decreasing tax rates for older vehicles.

6. Private Versus Commercial Use:

Vehicles that are used for commercial purposes (taxis, buses, freight hauliers) are often subject to substantially higher taxation than vehicles used for personal use (private vehicles).

7. Lump-Sum Payment:

In some states, owners have the option of paying a lump-sum "lifetime" tax at the time of registration instead of having to pay yearly renewals; this will generally result in a higher PER fee being paid.

What Is The State Variations In Road Tax Rules In India?

In India, the regulations governing the payment of road tax differ across states, and the following information provides a general comparison of these differences along with topics that should be verified with your regional Transport Authority (RTO).

One-time payment of road tax: In some states, when you register your vehicle, you may pay a "one-time lifetime tax," which will mean that after an initial higher amount is paid, there will be no annual tax requirement; other states, however, will require a periodic renewal of this tax before you can use your vehicle.
Electric vehicle incentives: To encourage people to purchase electric vehicles, some states are temporarily or permanently exempting them from paying road tax. The length of time and amount of these incentives will differ from state to state.

;

Surcharges for commercial vehicles: Each state has a different structure and frequency of inspections for commercial vehicles, such as goods transport and passenger service vehicles (taxis, buses). When operating across state borders, commercial vehicle operators may require a No Objection Certificate (NOC) to avoid paying more taxes.
Luxury vehicle surcharges: Luxury or high-value vehicles may also attract additional taxes or higher percentages.
Urban vs. rural road tax differences: Urban areas may have additional road tax levies imposed by some municipalities and local authorities.

For vehicle buyers or sellers, it is wise to consult the road tax in India state wise pdf or official state transport portal before making decisions.

When And Where To Pay Road Tax?

Once your new vehicle has been registered with your respective regional Transport Authority (RTO), you must pay road tax. Dealers selling their vehicles often also charge this fee as part of the sale price. In general, there are two ways that road tax can be paid, as follows:

At Vehicle Registration: Most states require that road tax be collected at the time of registration, when you're registering your new vehicle with the RTO. In some cases, dealers will collect this fee from you when you buy the vehicle.
Life Tax Option: Some states allow you to pay for your life tax option at the time of registration if you choose this option when registering your vehicle.
Annual / Periodic Payments: Where applicable, tax must be renewed annually or biannually via online portals or RTO offices. Many states support All India road Tax online payment, simplifying compliance.
Online Payment Channels: Most states allow for online road tax payments via their transport department website; these payments may also be made through a third-party payment gateway, or in some cases, through an integration with FASTag.
Receipt & Update of RC: Once you've made your payment, you will receive a receipt; keep this receipt safe. After you've made your payment, the Road Tax Certificate may have been updated or stamped to indicate the payment of road tax on your vehicle.
Inter-State Permits: If you intend to take your vehicle outside of the state in which it was registered, you should check the requirements for obtaining a temporary permit, as well as the additional road tax payment required.

Also Read: 9 New Road Projects In Rajasthan: Development In Transportation

What Are The Exemptions And Concessions Standards Of The Government In the Road tax?

This section discusses the types of exemptions and concessions, as well as who may be eligible for these benefits.

Government and Defence Vehicles: These are frequently completely exempt from Road Tax.
Electric Vehicles (EVs): To promote the use of EVs, many states offer various incentives (e.g., one to three years of partial or total EV Tax Relief).
Wheelchair/Disabled Vehicle Registrants: Individuals with disabilities registered as owners of handicap accessible vehicles may be eligible for concessions.
Agricultural/Ambulance/Charitable Vehicles: In some cases, agricultural, ambulance or charitable organisations have been provided exemptions from Road Tax.
Limited Time Concessions: During certain times of the year (festival season, green mobility incentive programs, etc.), states often announce temporary rebates.

Note: Generally, state-provided exemptions and/or concessions are provided for a limited period of time as well and are specific. You should always confirm these exemptions through written documentation.

Penalties, Fines And Legal Consequences For Non-Payment

Failure to fulfil your road tax obligations can present some serious issues for you and could lead to the following consequences.

Monetary Penalties: Your late payment will incur progressively increasing fines for each month that you remain delinquent.
Vehicle Seizure: A vehicle may be secured by the authorities until the tax amounts due on the vehicle are completely paid.
Barriers to Retaining Ownership of Vehicle/Renewing Vehicle Permit: The agency may deny you the opportunity to transfer ownership to another party, renew the fitness/registration certificate, or obtain a vehicle permit.
Legal Notices: If your non-compliance continues for an extended period of time, you can be served with a legal notice for payment and fined additionally.
Insurance Issues: If there are no road taxes paid at the time of the accident, no insurance coverage will be provided for that vehicle should you request to file a claim against it.

Many vehicle owners use a Road Tax penalty Calculator (available online) to estimate dues and avoid last-minute liabilities.

Road Tax For Commercial Vehicles And Inter-State Movement

The pointers below explain typical obligations and permits necessary for cross-border operations.

Compliance Area	Details / Requirements
Periodic Tax & Permits	Commercial vehicles such as goods carriers and buses must pay periodic road taxes and obtain valid route permits depending on state rules.
Inter-State Permits	For cross-border operations, transporters must secure interstate permits under the Motor Vehicles Act or operate via national permits where allowed.
Entry Tax / Waybill Rules	Some states levy an entry tax or mandate waybills for goods entering their jurisdiction, requiring proper documentation at checkpoints.
E-Way Bill Linkage	Road tax requirements often align with GST and e-Way Bill compliance; accurate cargo documentation is crucial for seamless movement.
Record Maintenance	Transporters must maintain updated logs, invoices, tax receipts, and waybills to ensure smooth inspections and avoid penalties.

Road Tax For Two-Wheelers And Small Vehicles

Two-wheelers generally face simpler tax structures but still require compliance. Typical features:

Flat Fee or Small Percentage: Many states charge a modest flat fee or low percentage on invoice value.
Engine Capacity Brackets: 50–150cc and 150–350cc bands are common; larger cc implies a higher rate.
Life Tax Options: A few states allow life tax even for bikes, usually at a low fixed multiple.

For those in Delhi or similar urban states with high vehicle density, you may want to check the road tax in Delhi for 2 wheeler to get the latest slab before purchase.

How To Check Road Tax Status / Validity

Vehicle owners can verify whether their tax is up to date by following the steps. Read and apply them carefully:-

Step 1: Visit your state’s transport department portal.

Step 2: Enter your vehicle registration number reveal payment history and due dates

Step 3: Generating or downloading the updated RC, if the payment status reflects as “paid”

This process ensures that you perform timely compliance and avoid road tax validity check issues.

Also Read: Cashless Treatment Scheme For Road Accident Victims: All You Need to Know

Documents Required For Road Tax Payment And Proofs

When you submit your payment or validate the payment of your road tax, please keep these documents available to avoid any delays in processing.

Registration Certificate (RC)
Invoice/Purchase Bill for the Vehicle
Insurance Certificate
Proof of Identity (Voter-ID/Aadhaar/Passport)
Emission/Pollution Under Control (PUC) Certificate as required.
Any Existing Tax Receipts or NOCs (No-Objection Certificates) for inter-state transfers.

Having a digital copy of all required documents will allow for more convenience during online submissions and electronic inspections.

Conclusion

Road tax is unavoidable, but it need not be burdensome if you understand the rules. Since each state applies its own version of the Motor Vehicles Act, it’s important to check road tax in India state-wise before you buy or register a vehicle. Always retain receipts and legal documents, and choose payment options wisely (e.g., lifetime tax where applicable). Using the All India road Tax online payment or state portals helps ensure compliance and avoids inconvenience.

For new vehicles, calculate the cost including the new vehicle tax in India, and for used vehicles, ensure that previous dues are cleared. When purchasing commercial vehicles or crossing state borders, make sure to follow permit and documentation rules. Finally, keep a ready record for road tax validity check and use online tools, such as a Road Tax penalty Calculator, to avoid fines later.

Get the latest updates on government schemes and policies with Jaagruk Bharat. Join India's biggest Jaagruk Bharat community. Share your thoughts, questions, and favourite topics with us.