Income Tax

Rules & Regulations for Road Tax in India

Rules & Regulations for Road Tax in India

Last Updated : March 14, 2023, 1:17 p.m.

When you go to buy a vehicle, you can see that the showroom cost mentioned in the brochure or the can manufacturing firm’s website is approximately ten percent less based on your residing state. If you combine the on-road price of a vehicle with the manufacturing charges, registration fees, road tax, and insurance, you can see that the overall cost of the vehicle rises by relatively ten percent of the vehicle cost. Registration charges and insurance are self-explanatory. You are bound to pay a road tax to drive a vehicle in the state you are residing. With technological innovations, online road tax payment is available.

What Does Road Tax Mean?

The Government of India charges a tax on the investment of a new vehicle specifically to manage the Indian roadways’ infrastructure. Road tax is changed to recover funds spent in multiple activities like managing road infrastructure and providing safety and recovery services on Indian roads.

Reason Road Tax is Imposed on Vehicle Buyers

The reasons road tax is imposed on vehicle buyers are as follows:

  • To manage the infrastructure of a broad road network.
  • Provide basic amenities such as street lights and road signs.
  • Providing safety precautions and first aid services if a vehicle driver cannot dodge untoward incidents.
  • Broaden the road network.
  • Upgrade highways and expressways.

According to the conditions mentioned in Section 39 of the Motor Vehicle Taxation Act of 1988, anyone buying a new vehicle is bound to pay a certain amount as road tax.

Who Levies the Road Tax and Why?

The road tax is a tax at the state level. The governments of multiple states levy it. The rules and regulations of road tax differ from state to state. The tax amount is different in each state because of the ranging percentage that various states have imposed. According to the guidelines mentioned in the Centre Motor Vehicles Act, if you are using a car for more than one year, you are bound to and it is mandatory to pay the overall tax amount at once. 

The road tax is imposed on every type of vehicle for private and commercial reasons. In addition to the government of each state, the Central Government, which imposes Goods and Services Tax, Customs Duty, Excise Duty, etc., also imposes the road tax. The central government manages and maintains the national highways.

If you are residing in West Bengal, and you purchase a vehicle and plan to drive it in the state, you will have to pay the road tax to the Government of West Bengal. However, if you go on a road trip to Orissa or Jharkhand or relocate to the neighbouring states, you will have to pay the road tax to the Government of Orissa or Jharkhand within one month because the State Municipal Corporation of each state is in charge of managing and maintaining the roads. When you are buying a new vehicle, you pay a road tax to the government of the state and the central government. 

Factors Determine Who is Bound to Pay a Road Tax

The online road tax payment depends on the vehicles’ showroom cost. The road tax calculation is based on a few factors, which are mentioned below:

  • The vehicles’ seating capability
  • The vehicles’ engine capability
  • The vehicles’ age
  • The vehicle’s weight

Ways to Pay Road Tax in India

With technological innovations, online road tax payment has become simple and effortless. Even though the Regional Transport Office of each state still collects road taxes, you can pay the road tax swiftly digitally while comfortably sitting in your home by just simply signing into the official website. To pay road tax through the online method, you can follow the steps mentioned below:

  • You can go to the official Parivahan website, which the Ministry of Road Transport and Highways maintain.
  • Under the Online Services section, you can see the Vehicle Related Services option and tap on it.
  • You can choose from the given options. You can wait till the official Parivahan website directs you to the state-centric website.
  • After the official Parivahan website redirects you to the state-centric website, you can choose your state and the Regional Transport Office from the menu, which drops down, and you can sign into your account.
  • You can fill up the provided space with your vehicle’s registration number, and you can enter other significant details.
  • You can authenticate the information, cross-check your entered details and pay your road tax.

To pay road through the offline process, you can follow the steps mentioned below:

  • You can go to the Regional Transport Office of the state you are residing in.
  • You can request a road tax form.
  • You can fill up the road tax form.
  • You can submit the road tax form with the tax amount.

Ways to Get a Refund on Regional Transport Office Road Tax

When you relocate to another state, you will require a Non-Objection Certificate from your existing Regional Transport Office and register again with a Regional Transport Office of the state you are relocating to and make online road tax payment or pay the road tax through the offline method. Nonetheless, you can receive a refund from the existing Regional Transport Office when you are shifting to a new state or when you discard your vehicle. You are required to go to the Regional Transport Office with the documents mentioned below. When you claim a road tax refund from the current Regional Transport Office, a few documents that you will require are as follows:

  • Appeal letter for a road tax refund
  • Paperwork related to insurance and pollution
  • Non-Objection Certificate from the existing Regional Transport Office
  • Receipt of the original road tax
  • Migration proof

Conclusion

Paying road tax is compulsory in India. And you cannot drive any vehicle without paying road tax. In addition, possessing an active insurance vehicle is compulsory. If your vehicle insurance has expired, you can select a motor policy. You can also pay road tax online. Online road tax payment is a significant step after you purchase a vehicle. It is a compulsory procedure that driving a vehicle is restricted if you do not pay road tax. Hence, if you buy a vehicle, it would be best to ensure that you pay the road tax on time and avert a penalty fine.

Related Post