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What is Road Tax / VAHAN Tax / Parivahan Tax in India

Team AckoApr 10, 2024

Whenever you buy a new vehicle in India, by law; you are required to do three things before you can drive your vehicle on the road. The first is to buy motor insurance for your vehicle. Second, you have to pay the road tax. The third and final step is to get your vehicle registered with your local RTO and get your permanent registration number. These three components and the ex-showroom price of a vehicle constitute the on-road price of a vehicle. While insurance and registration costs are self-explanatory, you may not know what road tax in India is, why it needs to be paid, and how to pay it. Let's delve into this to understand the need for road taxes.

Contents

What is Road Tax?
Who Has to Pay Road Tax in India?
Where to Pay Road Tax?
- Offline Road Tax Payment
- Online via the Parivahan Website
How to Get a Refund on Parivahan Road Tax?
Is There a Penalty for Not Paying Road Tax in India?
How Is Road Tax Calculated for Different Vehicles?
The Final Word
Frequently Asked Questions

What is Road Tax?

Apart from the National Highways in India, all roads are maintained by the state governments. Maintaining these existing roads, expanding the road network and providing amenities such as street lights, road signs, recovery services, and medical assistance would cost significantly. To recover the expenses incurred for all the above, state governments levy a tax on all motorists in their respective states. This is essentially what the Road tax is and why you are required to pay it.

As every state is different in size, it may have a bigger or a smaller road network to maintain and may pay different rates for raw materials. Therefore, the cost of upkeep also varies from state to state. This is why road tax is a state-level tax, and each state determines what percentage of tax vehicle owners have to pay.

Who Has to Pay Road Tax in India?

Every vehicle owner, irrespective of private or commercially owned vehicle, is due for road taxes equally. There are no exemptions. Road taxes are based on the ex-showroom price of a vehicle. These are calculated based on various factors such as:

the vehicle's seating capacity
engine capacity
weight and age of the vehicle

Each state has a different tax bracket for the above parameters.

Road tax in India, is collected when a new vehicle is registered at the Regional Transport Office (RTO). If the dealer is registering the vehicle for you, they will collect the required amount and give you a receipt once the payment is made and the vehicle is registered. Suppose you decide to register your vehicle yourself. In that case, you will have to pay the Road Tax for your vehicle at the RTO along with the relevant registration charges, after which your application to register your vehicle will be processed.

Depending on the state you are in and based on their rules and regulations, you will either have to pay the lifetime tax in one go or can opt-in for an annual payment scheme.

Where to Pay Road Tax?

New vehicle buyers have two options available to them when it comes to paying road tax.

Offline Road Tax Payment

One method of paying road tax is at the RTO while registering your new vehicle. The dealer can do this if they register the vehicle for you. Another way to go about it would be to pay the applicable road tax in person when you visit the RTO if you have registered your vehicle.

Online via the Parivahan Website

The Parivahan website allows you to pay your road tax online from the comfort of your home. To pay your road tax via the website, you need to follow these steps:

Visit the Parivahan website.
Click on the "Online Services" option in the main menu, and select the "Vehicles Related Services" option.
You will then be asked to select the state and the corresponding RTO.
Once the corresponding page loads, you must enter the vehicle's registration number and other details to verify the information.
Once your details have been verified, you can pay your road tax online.

How to Get a Refund on Parivahan Road Tax?

When you buy a new vehicle, the permanent registration and the road tax you pay are valid for 15 years. However, there are two scenarios where you are eligible to reclaim your road tax.

In the event your vehicle has been completely damaged, you can apply for a cancellation of your vehicle's registration and apply for a refund of the road tax for the number of years remaining from the 15-year time frame. For example, if your vehicle has only been used for 5 years and has been damaged beyond repair, you can apply for a refund for the remaining 10 years as you have paid the tax for 15 years. This option may not be available in all states as each state has specific laws.
When you re-register your vehicle in a different state and pay the relevant taxes, you can apply for a refund from the previous state of registration. However, this process must be done personally at the local RTO where your vehicle was originally registered. You will have to carry the receipt of payment in the current state where your vehicle is registered and any additional paperwork the RTO may require based on that state's laws regarding the refund process.

To get a refund of your road tax, you will have to visit the RTO where the vehicle was originally registered with the following documents:

A request letter by the owner to apply for a refund of the road tax.
The impression of the chassis number of your vehicle.
Copies of the original and the new RC/Smart Card of the vehicle.
Copies of the Certificate of Insurance of the vehicle.
The No Objection Certificate.
A copy of the road tax receipt paid in the new state.
A copy of the road tax receipt paid in the state where the vehicle was previously registered.
Copy of the proof of address in the current state
Bank account details of the owner, along with the address to which the cheque has to be sent.

Is There a Penalty for Not Paying Road Tax in India?

Yes, there is a penalty for not paying road tax on time. This can vary from state to state and go up to a full year's worth of tax. Tamil Nadu, for example, has a new ruling where 100% of the pending tax amount can be charged as a penalty if the road tax amount is still due after 45 days.

How Is Road Tax Calculated for Different Vehicles?

Road taxes are calculated based on certain factors such as the age of the vehicle, cost of the vehicle, what type of fuel it runs on and if it is a private vehicle or used commercially.

For example, here are the tax slabs for Karnataka and Delhi. Karnataka is the state with the highest road tax in the country vs the national capital, with one of the lowest road taxes among all the states.

Road Tax slabs in Karnataka:

Tax Bracket on Ex Showroom Price in Karnataka	Road Tax Slab in Karnataka
Vehicles below 4 lakhs	13%
Vehicles between 5 and 10 lakhs	14%
Vehicles between 10 and 20 lakhs	17%

Road Tax slabs in Delhi:

Tax Bracket on Ex Showroom Price in Delhi	Road Tax Slab in Delhi
Vehicles below 6 lakhs	Petrol Cars - 4%, Diesel Cars - 5%
Vehicles between 6 and 10 lakhs	Petrol Cars - 7%, Diesel Cars - 8.75%
Vehicles above 10 lakhs	Petrol Cars - 10%, Diesel Cars - 12.5%

The Final Word

So, in short; we need to pay road tax because it's the law of the land. The government needs funding to develop its infrastructure and ensure that roads are safe for all vehicles. Whether you are buying a new vehicle or moving from one state to another, do not forget to pay the road tax for that state. Failing to do so might land you in trouble.

Frequently Asked Questions

FAQs

How to check road tax status?

To check the status of the road tax, visit the Parivahan website. Enter the required details, such as the transaction ID, or your registration number and click on search.

Can I pay road tax without a vehicle's purchase invoice?

No, you do not need your vehicle invoice to pay road tax.

Will transport vehicles be charged a higher road tax?

This varies from state to state. Certain states levy a higher road tax on commercial vehicles, while some states, such as Karnataka, charge the same tax on private and commercial vehicles.

Will I need to repay the vehicle tax if I sell my vehicle to someone in another state?

No, if your vehicle is sold in a different state, the new owner will have to register the vehicle there and pay the taxes accordingly.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes.