Being a concerned citizen of India, and enjoying the government facilities, gives you an obligation or a necessity to each and every individual to give something in return and this in return is given to the government in the form of taxes. If we take a look at the taxes, then there are different types of taxes applied to different things at a different rate.
It is a compulsory tax to be paid by an individual purchasing a vehicle. The Road Tax is a state-level tax, i.e., the government of various states imposes it at their individual level. Each state has different rules and regulations for charging the road tax. Due to the varying percentage levied by different states, the amount of tax is also different. According to the Central Motor Vehicles Act, if a car is being used for more than a year, then it is compulsory to pay the whole amount of it at once.
Who levies Road Tax?
Road Tax is levied on all two-wheeler, four-wheeler, and other types of vehicles used for both private and commercial purposes. It is imposed by –
- The State Government who levies yearly or lifetime motor vehicles tax, passenger and goods tax, state vat, and toll tax.
- The Central Government which levies customs duty, central excise, central sales tax, GST and other additional cess based on the model and type of the vehicle.
Why is Road Tax A State Level Tax?
Other than national highways which are constructed and maintained by the Central Government, about 80% of the roads in all the states of India are constructed by the respective state government. Since the cost of construction of these roads is borne by each state, the road tax is essentially imposed by the respective state government.
Who has to pay the Road Tax?
Individuals purchasing a vehicle pay the road tax which is based on the ex-showroom price of the vehicle. The calculation of road tax depends on these following things:
- Seating capacity of the vehicle
- The engine capacity of the vehicle
- Age of the vehicle
- Weight of the Vehicle
When to pay a road tax?
During the registration of a vehicle, an individual is required to pay the road tax. Based on the various criteria of different state governments, the payment is made either annually or all at once. If you purchase a car in one state and pay a lifetime road tax, and then wish to use it in another state if you are shifting your residence, then you will be required to re-register the car in the new state and pay the road tax again. You are not required to pay road tax again if you are just visiting another state.
Where to pay the road tax?
The Road Tax is paid at the Regional Transport Office, i.e. RTO.
How to pay the road tax?
- Offline Method
The showroom or the automobile dealer is the one who makes the initial payment of road tax for a vehicle. Once the validity period of the first payment is over, the vehicle owner has to visit an RTO near his/her location, fill up the road tax form with personal details, and deposit the tax amount by cash or demand draft.
The common documents that one needs to produce to pay road tax are registration papers and insurance papers of the vehicle, address proof, and purchase invoice.
- Online method
Individuals can also opt to pay the road tax online by visiting the Transport Department website of the state where the vehicle was purchased. To pay the road tax online, a vehicle owner has to enter the Vehicle Registration Number and then submit it. In the next step, he/she has to select the mode of payment of tax and complete the payment process.
How to get Road Tax refund?
Cancellation of cars takes place right after the competition of 15 years of a car or more.
To discard a vehicle which is not more than 15 years old, a car owner needs to cancel the registration of that particular vehicle by visiting the RTO in which the vehicle was registered. However, if the vehicle has been transferred from one state to another, then the refund has to be claimed by visiting the RTO in which the initial registration was done. To cancel the registration, submit an imprint of the engine number along with the required documents at the RTO.
RULES REGARDING PAYMENT OF TAX IN DELHI
The rules and regulations for road tax in Delhi are based on the Delhi Motor Vehicle Taxation Act, 1962. Some of the important information regarding the rules and regulation of Road tax for Delhi is given below.
The tax percentage for private or non-commercial vehicles are as follows:
Life Time Tax Payment
The road tax for private or non-commercial vehicles is paid once, but for commercial and passenger vehicles, the road tax can be paid on monthly, yearly and half-yearly basis.
Levy of Tax
As per the Delhi Motor Vehicle Taxation Act, all commercial and non-commercial vehicles that are kept and used in Delhi have to pay the road tax. The road tax is levied based on the following factors:
- If the vehicle registration is done in Delhi, then a one-time payment has to be made depending on the category and cost of the vehicle.
- If the vehicle is registered in any state other than Delhi, then a one-time tax is levied deducting one-tenth of the tax amount paid each year after the registration was done in that other state.
If the motor vehicles are more than 10 years old, the owner of the vehicle can apply to the taxation authority for a certificate that states the age of the vehicle. Under the Delhi Motor Vehicle Taxation Act, vehicles that are more than 10 years old do not attract any road tax.
Payment of Tax
The registered owner or person who has possession of the vehicle has to fill a declaration form stating the particulars of the vehicle and its use in Delhi. The individual has to submit the form to the taxation authority after that. The car owner has to pay the tax according to the rate mentioned in the Taxation Act.
After the car owner has paid the tax that has been levied on his/her vehicle under section 3 of the Taxation Act, the taxation authority will issue a receipt which mentions the period for which the tax has been paid (if any). The certificate of registration will also mention the taxation period and whether or not the registration has been granted in respect of the vehicle under the Motor Vehicle Act. Note – The vehicle which is liable to tax under the Motor Vehicle Act cannot be kept or used in Delhi unless the owner has a valid taxation card displayed on the vehicle.