Rules and Regulations for Road Tax in India

Get comprehensive details about the rules and regulations for road tax in India, including state-wise regulations.
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3 min
30-March-2024

Road tax is imposed on vehicle buyers in India and as such, understanding the road tax regulations is essential for every vehicle owner. This article will give details on the latest road tax rules in India, where and how to pay road tax, state-wise regulations, penalties for non-compliance, and differences in road tax for various vehicle types.

What is the reason for imposing road tax on buyers?

Road tax is levied by the government to fund the construction and maintenance of roads and infrastructure.

  • It serves as a revenue source for the state government to cover expenses related to road development, repairs, and safety measures.
  • Road tax also acts as a deterrent to vehicle ownership, promoting public transport usage and reducing traffic congestion.

Where can road tax be paid?

For newly purchased vehicles, the initial road tax is covered by the vehicle dealer and is incorporated into the total on-road price of the vehicle. Subsequently, upon the expiration of its validity (in the case of annual payment), the responsibility for payment falls on the vehicle owner, who can choose to settle it through either online or offline channels.

Online method:

  • Visit the Vahan website at: https://parivahan.gov.in/parivahan/  
  • Go to Vehicle Related Services
  • Select your state and RTO
  • Select the required service, enter details and make the payment.

Read more: Parivahan Sewa

For offline payment:

You can visit the registered Regional Transport Office (RTO), submit the road tax renewal form, and pay the tax amount.

How to calculate road tax

Determining road tax involves varying procedures in different states. Typically, it is computed based on the ex-showroom price of the vehicle. Additionally, several factors come into play, including

  • Engine capacity
  • Seating capacity
  • Age of the vehicle
  • Weight of the vehicle

Documents required to pay road tax

  • Registration certificate
  • Valid vehicle insurance
  • Personal ID proof and address proof
  • Vehicle invoice

Importance of motor insurance for road tax payment

Having a valid motor insurance policy is important for paying road tax. So, ensure you have a motor insurance policy for your vehicle. At Bajaj Finance Insurance Mall, you can compare and buy car insurance and two-wheeler insurance policies offered by leading insurers in India through a completely digital process in just a few clicks. Get benefits such as cashless vehicle repairs, various add-ons to choose from, and renewal assistance.

Is there a penalty for not paying road taxes in India?

Individuals who neglect to fulfil their tax obligations in a timely manner are subject to fines. The government imposes penalties based on several criteria:

  • For first-time offenders, the penalty is equivalent to the tax amount due for two quarters.
  • Repeat offenders face fines equal to or less than the annual tax amount of the vehicle, with extensions occurring biannually. 

Is road tax different for different vehicle types?

Road tax collection by the Regional Transport Office (RTO) is determined by various factors, including:

  • The state where the vehicle is registered
  • Vehicle seating capacity
  • Engine capacity
  • Vehicle age
  • Vehicle weight
  • Fuel type
  • Vehicle class
  • Date of purchase and registration

Understanding new road tax rules and regulations is vital for all vehicle owners in India. Not only does it help in staying compliant with the law, but it also contributes to the nation's efforts to maintain and improve its transportation infrastructure.

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