Know all about VAHAN/Parivahan Tax & RTO Charges in Karnataka

In 2022, there are over 26 million registered vehicle across the Indian state of Karnataka (Link https://transport.karnataka.gov.in/storage/pdf-files/2022-23%20kar%20veh.pdf).. By 2023 this number has undoubtedly surged further. With so many vehicles operating on the state’s roads, regular upkeep is essential in maintaining fair driving conditions. Doing so requires a significant amount of investment on the state’s part.

How do you think state authorities pay for road repairs? They do so with income from road taxes!

To know all about road taxes, take a look at the following write-up.

Karnataka road tax first came into being in 1957 under the Karnataka Motor Vehicles Taxation Act. Even though the same Act is still followed, it has undergone several amendments since then.

A road tax is nothing but a form of taxation, which all motor-vehicle owners need to bear in Karnataka and all other states of India. State governments are responsible for collection of this particular tax from registered vehicle owners in that particular state. 

With this collected pool of funds, governments build and repair roads to maintain proper connections between one place and another. Additionally, besides maintaining road conditions, this tax amount is also used to provide adequate security to travellers using the state’s roads.

You need to clear your Karnataka road tax dues while registering your new or old vehicle with an RTO in the state.

The exact procedure for RTO tax Karnataka calculation depends on two major factors, namely cost and age of the vehicle. This can depend on several factors based on which state in India your vehicle is registered in.

Following are some factors:

• Number of wheels
• Engine cubic capacity
• No. of seats in the vehicle
• Vehicle cost
• Usage purpose
• Vehicle’s age
• Fuel type used by a vehicle

To understand the road taxation in Karnataka, one would need to be familiar with the different tax slabs.

Read on to understand the complete division of tax rates for two and four-wheelers.

Before proceeding, one should understand that road tax liability is different for people buying a new bike vs. purchasing used two-wheelers.

On New Two-wheelers

• New Vehicles with Prices up to Rs.50000 – In such an instance, owners would need to pay 10% of its cost as road taxes. Thus for a bike worth Rs.40000, the resulting tax liability would be Rs.4000.
• New Vehicles with Prices above Rs.50000 – In such a case, be ready to pay 18% of the cost as road tax in Karnataka.
• For new electric two wheelers, the owner is liable to pay 4% of the cost of the vehicle.

On Old Two-wheelers

• Not Older than 5 Years – Tax rates will vary based on the exact vehicle age. The effective range is between 75%-93%.
• Aged between 5 Years and 10 Years – Again the exact age will determine your liabilities. In such cases, the range of taxation is between 49% and 69%.
• Aged between 10 and 15 Years – Two-wheelers belonging in this category or older would have to bear road taxes at around 25% to 45% of the cost.

The procedure to calculate four-wheeler road taxes is also similar, based on its cost (for new models) and age (for older or used vehicles).

On New Cars

• New Cars with Prices up to Rs.5 Lakh – Owners falling in this category will need to shell out 13% of the car’s cost as taxes.
• New Cars Priced More than Rs.5 Lakh and Less than Rs.10 Lakh – 14% of such a car’s cost would be charged as taxes.
• New Cars Priced More than Rs.10 Lakh and Less than Rs.20 Lakh – In this instance, 17% of the vehicle’s cost would have to be borne as Karnataka road tax.
• New Cars Priced More than Rs.20 Lakh – 18% of a premium car’s cost needs to be borne as road taxes.

On Old Cars

• Not Older than 5 Years – Applicable tax rates ranging between 75% and 93% for cars falling in this category.
• Aged between 5 Years and 10 Years – 49%-69% of a car’s cost must be paid as road taxes on these older vehicles.
• Aged between 10 and 15 Years – Cars falling in this age group would draw taxes ranging between 25% and 45%.
• Electric vehicles - 4 wheelers falling in this category the applicable tax rate is 4% of the cost of the vehicle.

While several states tend to charge different road taxes for commercial and non-commercial vehicles, Karnataka is not one of these states. Here the purpose of usage does not matter when it comes to road taxes. Regardless of whether a car or bike is used commercially or not, road tax liable will be according to the rates mentioned above.

However, there is a separate tax rate for vintage and classic cars registered in Karnataka. For instance:

•  For classic cars- Rs. 1000
• For vintage cars- Rs. 500

A vehicle owner is allowed to drive a car/bike in Karnataka for 12 months without clearing road tax dues. He/she can clear this liability at any point of time during these 12 months. However, failure to do so would result in hefty penalties. These penalties would increase with each passing day of non-payment of these dues.

Individuals can opt for offline or online road tax payment. In the offline process, car owners would need to visit his/her local regional transport office or RTO.

Besides paying the road taxes, owners would also need to register their vehicle at this RTO. Keep in mind that one can only pay using cash or demand draft drawn out to the state RTOs when choosing the offline mode. 

However, if you are looking to clear road taxes online, you should follow the steps mentioned below:

• Step 1: Visit the official Parivahan portal, which is a website belonging to the Ministry of Transport.
• Step 2: Use a vehicle’s registration number to login to the portal.
• Step 3: Find the option marked ‘Online Service’ and select ‘Vehicle Related Services.’
• Step 4: Select the payment mode from the various options listed, such as debit card, internet banking and more.
• Step 5: Complete this payment by finishing all pertinent formalities.