How is road tax calculated in India?

Road tax in India is calculated based on the vehicle's ex-showroom price, engine capacity, and state-specific rates. Most states charge road tax as a percentage of the vehicle value (typically 2-10%) or at fixed rates based on vehicle category. Some states offer concessions for electric vehicles and hybrid cars. Road tax is a one-time payment for private vehicles in most states.

Is road tax the same across all states in India?

No, road tax varies significantly across Indian states. Each state has its own road tax structure with different rates and calculation methods. For example, Karnataka charges 2% for cars while Maharashtra charges up to 8%. Some states like Delhi have lower road tax rates. Always check your state's specific road tax rates before purchasing a vehicle.

How to pay road tax online?

Road tax can be paid online through the Parivahan portal, state transport department websites, or VAHAN portal. Select 'Tax Payment' service, enter vehicle registration number, calculate applicable tax, make online payment, and download the receipt. For interstate purchases, road tax is paid at the time of registration in the new state.

What happens if road tax is not paid?

Failure to pay road tax can result in penalties, vehicle seizure, and fines during traffic checks. Road tax default may also affect vehicle insurance validity and renewal. Some states impose ongoing annual tax for commercial vehicles. Always carry proof of road tax payment while driving.

Can road tax be claimed back when selling a vehicle?

In most Indian states, road tax is non-refundable upon vehicle sale. The tax is considered paid for the remaining validity period but cannot be claimed back. Some states allow refund of unused road tax period when transferring registration to another state. Check with your state's transport department for refund policies.

UK Electric Vehicle Tax 2026: VED, BIK and Road Tax for EVs

Electric vehicles enjoy significant tax advantages over petrol and diesel cars in the United Kingdom. Understanding the specific electric vehicle tax rules for 2026 is essential for anyone considering an EV purchase or company car lease.

Vehicle Excise Duty for Electric Vehicles

Five-Year VED Exemption

Pure battery electric vehicles registered after April 2017 qualify for zero vehicle excise duty for the first five years of registration. This means a pure EV owner pays nothing in road tax for the first five years, saving approximately 950 GBP compared to a standard petrol car paying 190 GBP per year. The exemption applies automatically when the vehicle is registered as a pure electric vehicle with DVLA.

Annual VED After Five Years

From year six onwards, electric vehicles pay the standard annual VED rate. If the vehicle's list price was below 40,000 GBP at the time of first registration, the standard rate of approximately 190 GBP per year applies. If the list price exceeded 40,000 GBP, the luxury supplement rate of approximately 325 GBP per year applies from year six. Importantly, plug-in hybrids do not qualify for the five-year exemption and pay full VED from the first year of registration.

Company Car Tax: Benefit in Kind for EVs

The 2 Percent BIK Rate

Pure electric company cars attract a benefit in kind rate of just 2 percent of the P11D list price in the 2025-2026 tax year. This is the lowest BIK rate available for any vehicle type and represents a dramatic reduction from the 7 percent that applied in the 2024-2025 tax year. The low BIK rate makes pure electric company cars exceptionally tax-efficient for employees. Related: UK Zero Emission Vehicle Tax 2026 | Electric Vehicle Tax India 2026 — EV Road Tax by State Guide | UAE EV Rebates 2026 | UK EV Incentive 2026.

For example, a Tesla Model 3 Long Range with a P11D price of 45,000 GBP creates an annual BIK value of only 900 GBP. At the higher rate tax band of 40 percent, the driver pays just 360 GBP in company car tax for the entire year. An equivalent petrol BMW 3 Series at 27 percent BIK would cost 4,860 GBP in the same tax band.

Plug-in Hybrid BIK Rates

Plug-in hybrids with CO2 emissions between 1 and 50 grams per kilometre attract a BIK rate of 18-19 percent depending on their exact CO2 emissions. While significantly better than petrol, this is still nine times higher than the 2 percent rate for pure EVs. The gap between pure EV and plug-in hybrid BIK rates creates a strong financial incentive to choose pure electric over plug-in hybrid for company car drivers.

Insurance Premium Tax and Vehicle Taxation

Electric vehicles are subject to the same insurance premium tax rules as petrol and diesel vehicles. There is no additional IPT surcharge on EV insurance policies. However, electric vehicles historically attracted lower insurance premiums due to their lower accident risk profile, though this has been offset in recent years by higher repair costs for EV-specific components such as battery packs.

The Financial Case for Electric Vehicle Taxation

When all tax advantages are combined, pure electric vehicles offer compelling savings over their petrol and diesel equivalents. The five-year VED exemption saves approximately 950 GBP. The company car BIK advantage for a 45,000 GBP vehicle saves approximately 4,500 GBP per year in company car tax compared to an equivalent petrol vehicle. Zero fuel duty on home electricity charging saves approximately 1,000 GBP per year for an average driver covering 10,000 miles. Together, these tax advantages make pure electric vehicles the most cost-effective vehicle choice on a whole-life cost basis for many drivers.

Summary

UK electric vehicle tax rules in 2026 provide the most favourable treatment of any vehicle type. Pure EVs benefit from zero VED for five years, the lowest BIK rate at 2 percent for company car drivers, and exemption from fuel duty on home charging. These advantages make electric vehicles increasingly attractive from a tax perspective.

Official Resources: GOV.UK Check Vehicle Tax | GOV.UK Vehicle Tax | DVLA Online | MOT Check

Frequently Asked Questions

Q: How much is car tax (VED) in the UK 2026?
Car tax rates in the UK depend on your vehicle's CO2 emissions and list price. Standard rates start from £190 per year for petrol and diesel cars, with zero-rated VED for EVs. First-year rates vary from £0 to £2,605 depending on emissions. Additional premiums apply for vehicles over £40,000.

Q: How do I check if my car is taxed online?
You can check your vehicle's tax status for free on the Gov.uk website at gov.uk/check-vehicle-tax. You'll need your vehicle's registration number (number plate). You can also check via the Motor Insurance Database to verify road tax and insurance status simultaneously.

Q: Can I get a refund on car tax if I sell my vehicle?
Yes — if you sell or scrap your vehicle, you can claim a refund on any full months of remaining road tax. Contact DVLA with the V11 reminder letter or apply online at gov.uk. Refunds are usually processed within 4-6 weeks.

Q: Is road tax refund available when transferring ownership?
No — road tax does not transfer with the vehicle. When you sell your car, the tax is automatically cancelled and any remaining months are refunded to you by DVLA. The new owner must tax the vehicle immediately. As a buyer, always verify the vehicle's tax status before purchasing.

Q: What is the luxury car tax threshold in the UK 2026?
The additional rate for vehicles over £40,000 (list price) adds £410 per year to standard VED rates for years 2-6 of registration. This surcharge brings the annual cost for high-emission vehicles over £40,000 to around £600-690 per year. Pure EVs under £40,000 pay zero VED.