When you buy a vehicle, you would find that the ex-showroom price of the vehicle and its on-road price are different. The ex-showroom price of the vehicle represents the manufacturer’s cost while the on-road price is the price which you need to pay to drive the vehicle in India. The on-road price is calculated by adding registration charges, insurance cost and road tax to the ex-showroom price. Registration charges are paid to register your vehicle with the RTO while insurance is a mandatory coverage on the vehicle. Road tax, on the other hand, is the tax payable to the Government to drive your vehicle in a particular city in India.
What is road tax and why is it paid?
Road tax is a tax which you pay to use your vehicle on Indian roads. Roads connect cities and places together and for a better commute, the Government spends money on construction and maintenance of roadways. Money is also spent on providing riders with safety services and emergency services if they suffer from an accident. Road signs, road lights, footpaths, etc. require money for construction and maintenance which is spent by the Government to develop the infrastructure of the country. These expenses done by the Government are then recovered from citizens when they use the roads to drive their vehicles. This recovery is done in the form of road tax. Thus, every motor vehicle which is purchased in India has to pay a road tax or a Motor Vehicles Tax so that it can be driven on Indian roads. The revenue which the Government collects through road tax is used to expand roadways, maintain existing ones and upgrade them as and when needed. Thus, road tax is an important tax for maintaining the infrastructure of the country.
Who levies road tax?
Road tax is levied by State Governments since they are tasked with the construction and maintenance of roads in their States. So, you would have to pay the road tax levied by the State in which you buy your vehicle. For instance, if you buy a vehicle in Mumbai, you have to pay the road tax levied by the state of Maharashtra and if you buy your vehicle in Bangalore, road tax of Karnataka Government would be payable.
Calculation of road tax
Road tax is payable for all types of vehicles which are bought in India. However, the quantum of tax would depend on various factors. These factors include the following
- The engine capacity of the vehicle
- The seating capacity of the vehicle
- The age of the vehicle
- The weight of the vehicle
- The fuel used by the vehicle
- The State in which the vehicle is being registered
- The intended usage of the vehicle, i.e. whether it is a personal vehicle or a commercial one
- The class of vehicle being bought – agricultural vehicle, industrial vehicle, two-wheeler, four-wheeler, etc.
- Date of registration
- Date of purchase
The amount of road tax is expressed as a percentage of the vehicle’s cost. However, this percentage is different for the different states of India and so the road tax depends on the state where you register your vehicle.
Payment of road tax
Road tax is paid when a vehicle is registered with the RTO. This usually happens when a vehicle is bought for the first time. However, if you transfer to another state, you would have to pay the road tax of that State again if you would use your vehicle in the new State.
Road tax is usually payable one time at the time of registration. However, in some cases, road tax might be paid yearly.
How to pay road tax in India?
Road tax in India can be paid in two ways – offline and online. Here are the steps for both these ways:
- Road tax online payment
With the advancement of the online mode, you can pay road tax online. The steps for road tax online payment are as follows
- To pay road tax online, visit the website of the Ministry of Road Transport and Highways. The website link is https://parivahan.gov.in/parivahan/
- On the home page choose ‘Online Services’ and then click on ‘Vehicle Related Services’
- On the next page click on ‘Delhi & Sikkim State’ or ‘Other States’ tab with respect to the State in which the road tax is payable
- A new page would open which would take you the website of the respective State’s road and transport services
- Enter in the registration number of your vehicle to log in and avail online services
- On the online services section you can pay the road tax online
- Road tax offline payment
To pay your road tax offline, you can visit the RTO of the State and fill up the relevant form. Submit the form along with the payment of the road tax and the tax would be paid.
Documents required for payment of vehicle tax
To pay road tax online or offline in India, the following documents would have to be submitted to the RTO
- RC book of the vehicle on which the road tax is being paid
- Insurance policy document of the vehicle
- Invoice of the purchase of the vehicle
- Identity proof of the vehicle owner
- Address proof of the vehicle owner
- NOC from the RTO of the original State in which the vehicle was first registered if the vehicle is moved to another State and road tax of another State is payable
Deadline for payment of road tax
Road tax is payable on registration of the vehicle. If, however, you move to another State, you are required to pay the road tax of that State too. For payment of this road tax, you are allowed a period of one month from the date of moving to the new State to pay the road tax to the RTO of the new State.
Refund of road tax
Refund of road tax is available in the following two cases
- Discarding of the vehicle
- Relocating to another State
In the first case, if your vehicle is less than 15 years old and you are discarding it, you can claim a refund of the road tax paid. You would have to visit the RTO of the State in which the vehicle was registered to claim the refund.
In the second case, if you are relocating to another State, road tax of that State would have to be paid again. You can, therefore, claim a refund from the RTO of the State from where you are shifting. To do so you would have to visit the RTO of the original State and cancel the registration of your vehicle. To do so, you would have to submit the imprint of the engine number or chassis number of your vehicle along with other relevant documents.
Yes, if the vehicle is sold to an individual in another state, the buyer would have to pay the road tax of the State in which he/she lives to drive the vehicle in that State.
Yes, road tax can be paid without the invoice of the vehicle by submitting other documents of the vehicle like the RC book, PUC, etc.
No, a refund of road tax would not be paid unless the vehicle is re-registered in the new State.
The amount of road tax depends on the state in which the vehicle is being registered. Every State has a different calculation formula for road tax. You should, therefore, find out the amount of road tax in the State where you are registering your bike.
Road tax depends on the engine capacity, seating capacity, weight of the vehicle and other factors. Since a transport vehicle is different from a personal vehicle, the road tax would be charged after taking into consideration the vehicle’s details and might be higher than the tax payable for a private car.