Road Tax in India: A Comprehensive Guide

Posted on: Mar 21, 2022 | | Written by:

Road Tax in India: A Comprehensive Guide

There needs no special mention regarding the vastness of the Indian territories and their extensive geographical location. The roadway network of the country stretches for over five million kilometres, and it is consistently on the rise, making a global record.

Such a vast interconnected roadway network requires consistent proper maintenance. It is financed by the Indian government by collecting a fixed sum of taxes from the residents. So, every Indian citizen must clear their due taxes to ensure proper maintenance of the roads. Paying the road tax and maintaining the car insurance ensures the proper safety of the concerned vehicle.

What is meant by road tax?

While purchasing any vehicle, the buyer needs to pay the base price along with certain other additional charges. These added taxes include the registration charges, the concerned motor insurance costs along with the motor and the road tax. The road tax is that sum of money that is paid while purchasing any vehicle in the concerned country or state. Depending on the state, the tax amount, the clauses, the structure varies.

If any vehicle uses the national highway or the state highway, an additional tax is levied. The amount of this tax is determined by the distance, the regulations of the specific state, and other necessary factors.

How is road tax determined?

The road tax gets determined by the specific governmental bodies:

● The state government duly levies the state vat tax, lifetime or annual motor vehicles tax, toll tax, goods tax and passenger tax.

● The central government levies the GST, central excise, customs duty, central sales tax, along with other added charges, depending on the specific category of the concerned vehicle.

Who needs to pay the Road Tax?

While buying a vehicle, the buyer incurs not only the cost of the vehicle insurance. The road tax is a mandatory tax that every car owner needs to pay while buying any vehicle. In our country, this tax is charged for both commercial and private vehicles. Irrespective of the size of the motorized vehicle owner needs to pay this tax. The vehicles include cars, bikes, scooters, auto-rickshaws, trucks, buses, CUV, SUVs, etc.

How to pay road taxes in India?

Earlier, the vehicle owner was required to pay a visit to the respective RTO of the concerned state, do the necessary paperwork and pay the amount. Although the RTOs are still in motion about road tax collection, you can forego the hassle quickly with a few simple clicks on your smartphone through the official website of the transport department.

● First, you need to visit the official website of the Parivahan department, which is maintained by the Ministry of Transport and Highways.

● Next, click on vehicle-Related Services under the menu Online Services.

● You have to select between the Other States and Delhi & Sikkim State and wait as you are redirected to the specific state.

● On this new page that opens, you have to log in to your account from the dropdown list provided by selecting your respective RTO and state.

● Enter all the necessary details as required, including your vehicle’s registration number, engine number, chassis number, etc.

● Finally, verify all the details and proceed to pay the due tax and check out.

How do you receive a refund on the RTO Road Tax?

When you move to another state and need to transfer your vehicle, you will need a NOC from your present RTO, undergo the registration process with the new state and repay the due road tax. But, you may receive a certain refund of taxes already paid from the current RTO, as you discard your vehicle or get relocated.

To claim the refund, you need these documents:

● A request letter for refund

● Smart card (a notarized copy of the original)

● The imprint of the chassis

● Car insurance and PUC documents

● NOC from the current RTO

● Original receipt of the road tax

● Migration proof

● DT and RTO Form 16

● CRTI Intimation (for Karnataka only)

Penalty for non-payment of the road taxes:

If you don’t clear your dues, you will have to pay a road tax penalty. It is calculated on the number of tax dues for two quarters for the first time defaulters. In the case of serial defaulters, the penalty may amount to equal to the annual tax of concerned vehicle, extending up to twice as much as it is.

The minimum penalty amount is INR 300, extending up to a single-time annual tax. For serial defaulters, the minimum limit is INR 500, which can be further extended accordingly.

Our above discussion sheds light on the basic and vital aspects of road taxes. Every responsible citizen of the country must pay road taxes within time and maintain valid car insurance ensuring the proper safety of the concerned vehicle, covering all the chief legal aspects.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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