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Road Taxes

The Indian government levies road taxes on all the highways, whether it be a state or national highway. They need these funds for various reasons. Let us now look into road taxes in detai.

What Is Road Tax?

Road tax is the tax that the vehicle owner needs to pay to be allowed to drive on public roads.

Who Levies Road Taxes?

Only national highways in India are built and maintained by the central government. Most other roads in India are built and conserved by the respective state governments. Therefore, it is the state government that charges the road tax on vehicles.

Who Has To Pay The Road Tax?

Every person who purchases a motorized vehicle for either commercial or personal use has to pay a road tax. The vehicle can be a two-wheeler, three-wheeler, four-wheeler or commercial trucks and trailers.

Why Does The State Government Levy Road Taxes?

The government levies road taxes for the following reasons.

  • To provide basic infrastructure - some basic services and systems.
  • To provide some basic amenities like street lights and road signs.
  • To enable people to travel comfortably and conveniently on roads. This is very important, especially on highways. Every state and national highway is taxed in India.
  • To provide security and safety on roads: Dacoits are common in certain parts of India and it is essential to provide security to travelers. Highway robberies are common.
  • Emergency first aid is needed for road accidents. It is required for both the drivers and the passengers.
  • The funds from taxes are used to expand and upgrade our roadways, highways, and expressways. This way, more vehicles will move on the roads.

How Is Road Tax Computed?

The amount of road tax levied on a particular vehicle varies across states. This is because each state has its own state motor vehicle act. The tax amount is computed according to this state act. The road tax is usually a percentage of the buying cost of the vehicle.

The road tax is evaluated based on:

  • engine and seating capacity
  • unladen weight
  • laden weight
  • Age of the vehicle
  • Type of fuel used by the vehicle

When Is Road Tax Paid?

The road tax is generally paid at the respective regional transport office (RTO). It is usually paid at the time of registration of the vehicle. Generally, the dealer collects the tax on the behalf of the customer, and the customer will get a receipt for the payment made.

What Is the Method To Pay Road Taxes in India?

Previously, the owner of the vehicle had to visit the state’s RTO in person and fill out a road tax form with the required data. Now, although this facility is still available, you can pay the road tax online from the comfort of wherever you are located. Here are the steps to pay the road tax online.

Step 1: Go to the Parivahan website maintained by the Ministry of Road Transport and Highways.

Step 2:Click on Vehicle Related Services under Online Services.

Step 3:Select between the two options - Delhi and Sikkim State and the Other States. You will be redirected to the website of the particular state

Step 4:Here, select your state and RTO from the drop-down menu and log into your account.

Step 5:Enter the registration number of your vehicle and fill in other details.

Step 6: Verify the details and make the road tax payment.

How to Get a Refund on RTO Road Tax?

When you move to a new state, you will be required to obtain a NOC from your current RTO, register again with the new state RTO, and make the road tax payment again. However, you can receive a refund from the current RTO when you take your vehicle to a new state or discard your vehicle.

You will need the following documents to claim a refund:

  • Request letter for refund
  • A smart card (original or notarized copy)
  • Chassis imprint
  • Pollution and insurance documents
  • NOC from the current RTO
  • Receipt of original road tax
  • Proof of migration
  • RTO Form 16 and DT
  • CRTI Intimation (only applicable in Karnataka)
  • Car owners will be required to visit the current RTO physically with the relevant documents in order to claim a road tax refund.
  • Is there a Penalty for Not Paying Road Taxes in India?
  • If you do not make the road tax payment within the deadline, you will be levied a fine. The fine charges are calculated as follows:
  • If you are defaulting for the first time, then you will have to pay a fine equivalent to the tax amount for the first two quarters.
  • If you default continuously, you will have to pay a fine equivalent to the vehicle’s annual tax. This may be made to be double the yearly tax amount.
  • Fines will not be lower than Rs. 300, which can be expanded to the one-time annual tax. This fine cannot be lower than Rs. 500 and can be made twice the annual tax amount for continuous defaulters.
  • Besides this, the following awardees are need not pay road tax in India.

    • Param Vir Chakra, Ashok Chakra
    • Vir Chakra
    • Maha Vir Chakra, Kirti Chakra
    • Shaurya Chakra

What Are Vehicles Exempted From Paying Road Tax In India?

The following vehicles need not pay Road Tax:

  • Vehicles used as ambulances
  • Vehicles with Ministry of Defense passengers
  • Central and State armed forces in uniform.
  • Vehicles that are owned by the National Highways Authority of India.
  • An executive Magistrate.
  • A vehicle belonging to any other government agency or organization for the survey, inspection, operation or construction, and maintenance of national highways.
  • Motor vehicles of the fire-fighting department.
  • Vehicle used as a funeral van.

Conclusion

It is essential to pay road taxes without defaulting in India. There is no road tax if you are just a visitor to a state. Only people who purchase a new vehicle are required to pay road tax to the respective state governments. However, if you are relocating, you will need to visit the RTO in that state and get a NOC.

FAQS

1. Is Road tax paid annually?

Car tax can be paid annually, monthly, or every six months. Generally, annual payment will be the cheapest but you will be given the option when you apply for a vehicle.

2. What is road tax called?

Road tax is called vehicle excise duty (VED). Commonly called car tax or road tax, it is a major tax for cars.

3. What happens if I drive without road tax? Will I be penalized on my license?

No, you will not be penalized on your license. If you drive without paying the vehicle excise duty, then charges for fine will be sent to the address of the registered keeper of the vehicle.

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