In India for every vehicle purchase, be it bike, car, truck, or any other vehicle, the government of India charges the Road Tax for the vehicle, which is included in the vehicle price at the time of purchase itself.
If you have purchased any vehicle, in the price list, there will be two pricing variations one is showroom price which offers only vehicle base price and the other is on-road price, which includes insurance, road tax, and registrations charges.
In this article, we will provide detailed insights about the Road Tax and how it is collected, calculated and many details to follow.
What is a Road Tax?
The government of India charges the road on every vehicle purchase in order to maintain the infrastructure of roadways in India.
The Vahan Tax is basically the recovery fund spent by authorities on various activities like safet measures and other essential road services in the country.
Why is Road Tax levied on buyers?
Indian roadway network is the second largest road network in the world next to the United States with a total road length stretching over 6,215,797 kilometers (till 2021).
The government of India has to spend a huge amount of money to maintain the road network with basic amenities like street lights, signboards. To recover the expenditures incurred on road infrastructure government collect in the form of road tax at the time of vehicle purchase in India.
Apart from recovery, the amount collected on road tax will be spent on the Indian roadway expansion, Highways and expressways development in India.
So, if any person purchase vehicle in India has to pay the road tax according to the Indian law under Section 39 of Motor Vehicle Act 1988.
Who levies Road Tax and why is it State Level?
In India, the road tax is levied and collected by the respective state government and the union government will maintain the road networks.
The prospective buyer will be paying the road tax, where the buyer purchases the vehicle, irrespective of the place of residence.
The state government is collecting the road tax from the buyer as the state government is responsible of developing the road network with the aid of state municipal corporations.
The national Highways will not come under state government since it comes directly under the union government.
How Can You Pay Road Taxes in India?
With the adaption of digital technology, the government of India has eased the process of tax payment, same in Road tax too.
The vehicle owners can pay the road tax online using the parivahan website for the smooth operation of payment and dues.
Step by Step guidelines to pay the Road Tax in India
Step 1: Log in to the parivahan website of the Road Transport Ministry.
Step 2: Select the vehicle-related services section under the Online Services section.
Step 3: Select the state option provided under the section
Step 4: Choose the respective state where your vehicle is registered
Step 5: Provide basic details of the vehicle such as vehicle registration number and other details required to complete the process
Step 6: Verify details and pay your road tax.
How to Get a Refund on RTO Road Tax?
When the vehicle owner moves from one state to another, the tax needs to be paid in the respective state to the newly moved region, for that, the vehicle owner must get NOC from the existing state RTO Offices.
Also, it has paid the road tax and can request for refund on the amount paid for the road tax.
To claim the road tax, the vehicle owner need to produce the following documents:
- Refund Request Letter
- A smart card (original or notarized copy)
- Chassis imprint
- Pollution and insurance certificates
- No Objection Certificate (NOC) from current RTO
- Original road tax receipt
- Proof of migration
- RTO Form 16 and DT
What is the penalty for not paying road taxes in India?
There will be a penalty of charges for defaulters who do not pay the road tax amount within the prescribed time period.
The penalty charges will be calculated after considering the below-mentioned factors:
- Road tax amount payable for the respective vehicle for the first two quarters.
- For non-regular payment of taxes, the serail offenders will be penalised heavily, it may lead up to twice the amount of the actual road tax charges.
- In general, the fine amount of the non-payment or delay in the road tax for the vehicle varies from Rs 300 to Rs 500 depending on the situation.
What are parameters are considered for Road tax in India?
Road tax for a vehicle is calculated based on various factors, including the following:
- Vehicle Registration State
- Engine Cubic Capacity (CC)
- Seating capacity (bike, car, omnibus, truck)
- Vehicle’s age
- Vehicle Weight
- Vehicle Fuel type (petrol vs diesel)
- Usage and vehicle class – personal vs commercial use
- Date of purchase and registration