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How to Calculate Road Tax in India
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It is a state level tax which is imposed by the Indian Government on any vehicle - be it a two-wheeler, four wheeler, private or commercial vehicle, before it starts moving publicly on the road It is levied by most of the states at different percentages.

Which Authorities Levy Road Tax?

Three authorities can levy Road Tax:

  1. Central Government

  2. State Government

  3. Local bodies

Why is the Road Tax Levied in India?

Roads entitle the human beings living at different places to stay connected, trade and travel anywhere from one state to another in the whole country in order to raise money for the improvisation of construction standards, maintenance and security of pre-built roads, its important for the government of states to levy tax on the people as all the roads are not built by the Central Government. The Motor Vehicle Act, 1988 has framed the guidelines for the concerned authorities to follow.

When does the Road Tax Get Paid?

It is paid at the time of registration of vehicle in the RTO, under whose jurisdiction the address of the owner comes. It is paid either on yearly basis or once in a lifetime, based on the rules of different state governments. In case the owner has already paid for road tax in one state and he is using the car in other state, he needs to pay road tax again to the state government through Registered Transport Office.

If a car has been used for more than a year, then the owner would be required to pay the whole amount at once.

In case of commercial vehicles, Road Tax needs to be paid at the Headquarters of the Transport Department.

What Factors Are Taken into Consideration While Calculating Road Tax?

There are number of factors which are considered while calculating Road Tax:

  1. Age

  2. Seating capacity

  3. Weight

  4. Type of fuel.

  5. Engine capacity

  6. Length and width of the vehicle.

  7. Purpose of the Vehicle.

  8. Showroom price of the vehicle.

  9. AC/Non-AC

How is the Road Tax Calculated in India?

Road tax is levied by Central Government, State Governments and Local Authorities wherein Custom duties, Central Excise and Central Sales Tax are imposed by Central Government and Motor Vehicle Tax, Passenger and goods tax, State VAT and Toll taxes are levied by State Governments. Local Bodies collect Octroi.

When a vehicle is bought, CST, Central excise duty and VAT are charged adding to the total cost of the vehicle. Rate of Road Tax vary in different states; for example: in Maharashtra it is charged at 7% of the cost of vehicle,in Gujarat it is 6% and in Tamil Nadu it is 10% for the cars of Rs.10 lakh or more.

How can the Refund of Road Tax Be Done?

If a vehicle has been used for less than 15 years and the owner decides to discard it, then the registration needs to be cancelled from the RTO office from where it was registered to claim the refund. In case the owner is transferring from one place to another, the Road Tax refund needs to be claimed from the RTO where it was initially registered.

There are few steps which need to be taken care of, for cancelling the registration:

  1. The engine and chassis number should be removed and submitted at the RTO.

  2. The number plate should be submitted at the RTO.

How can the Road Tax Be Applied Online?

If the owner of the vehicle can't go to the RTO, then he or she can apply for it online to the respective transport department by submitting Vehicle registration number and Chassis number, selecting payment mode and paying the required amount.

What Is the Role of GST in Road Tax?

Though GST is replacing all the indirect taxes but Road Tax, Property Tax and Stamp Duty doesn't come under the scope of Gst, so it doesnt have any effect on Road Tax.

Road Tax in different States and Union Territories:

  1. Road Tax in Andhra Pradesh

  2. Road Tax in Telangana

  3. Road Tax in Maharashtra

  4. Road Tax in Kerala

  5. Road Tax in Karnataka

  6. Road Tax in Madhya Pradesh