What is Road Tax?
Road tax is a state-level tax which is levied on all motor vehicles be it two-wheelers, four-wheelers, or goods-carrying vehicles used either for private or commercial purposes. Road tax is a mandatory tax to be paid by customers who purchase vehicles to be used on a public road.
When is Road Tax Paid?
Road Tax, which is also known as Motor Vehicle (MV) Tax, is paid at the time of registration of a vehicle at respective Regional Transport Office. For various states, such as (Chhattisgarh, Haryana, Himachal Pradesh, Jharkhand, Punjab and Rajasthan), the road tax can also be paid online at the official website of the Ministry of Road Transport and Highways.
For other Indian states, customers can pay the tax online by visiting the official website of the Transport Department of the state where the vehicle is registered. For instance, to pay road tax for a vehicle registered in Tamil Nadu, you may visit Tamil Nadu’s Transport Department’s website and pay the road tax.
For non-transport vehicles, motor vehicle tax is a One Time Payment, which is valid for 15 years. After 15 years, the non-transport vehicles’ owners need to pay the tax during the renewal of registration for 5 years period. In case of transport vehicles, the tax is paid on a quarterly basis or as prescribed in the concerned state’s motor vehicle act. According to the Motor Vehicles Act, 1988, a transport vehicle means a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle
How much payment is required in Road Tax?
In India, the amount of road tax applicable on a particular vehicle differs from state-to-state as each state has its own state motor vehicle act according to which the tax amount is computed. The motor vehicle tax is calculated on the basis of various factors, including engine and seating capacity, unladen weight, laden weight, cost of vehicle, etc.
Transfer of Vehicle’s Registration – Inter State
When an individual transfers his/her vehicle from one state to another before the expiry of the period for which the tax has been paid to the state government which initially registered the vehicle, then that person can either be entitled for a refund if the amount of road tax paid in the current state is higher than the amount of road tax in the state in which he/she is moving. Or that person can be required to pay more road tax if the amount of road tax in the state in which he/she is moving is higher than what he/she has already paid as road tax.
For the transfer of a vehicle from one state to another, a person needs to first cancel the vehicle’s initial registration and get it re-registered in the state he/she is moving. However, for temporary movements between states, no re-registration is required, hence, no change in the amount of road tax.
Road Tax v/s Toll Tax
Road Tax and Toll Tax are two different concepts. Road tax is charged for using the roads of the state in which the vehicle is registered, whereas Toll tax is charged for temporarily using the national highways or certain bridges in other states.
Moreover, unlike road tax, toll tax is collected at toll plazas. The term ‘Temporary Movement’ may vary for different states, for instance, in case of Delhi, a inter-state movement spanning for 90 days is termed as temporary.