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.

Car Tax and the Budget 2025 UK: What the Chancellor Annou...

The annual budget and Autumn Statement are key moments for car tax policy. Here is what the 2025 budget delivered for road users and what it means for your vehicle tax costs.

VED Rates: No Major Changes

The 2025 Autumn Budget maintained the existing VED structure: standard rate of £190 per year for petrol and diesel cars, £10 for zero-emission vehicles, first-year bands based on CO2, and the £410 premium supplement for vehicles over £40,000. There were no increases to VED rates in 2025 — the freeze continues the policy established in previous budgets.

Fuel Duty: Another Year Frozen

Fuel duty remained frozen at 52.95 pence per litre — the longest freeze in history. The temporary 5p cut introduced in 2022 was made permanent in the 2024 Budget. This is significant for petrol and diesel car owners, as fuel duty represents a much larger annual cost than VED for most drivers. The freeze benefits all vehicle types but particularly those who drive high-mileage.

Company Car BIK: Gradual Increases

The Budget confirmed the planned trajectory for company car BIK rates: the zero-emission EV rate increases from 2% to 5% from April 2027. For 2025-26 and 2026-27, the 2% rate is maintained. This provides certainty for company car planning — businesses and employees can budget knowing the BIK trajectory. The gradual increase rather than a sharp jump reflects government policy to taper EV incentives rather than remove them abruptly. Related: Car Tax and the Budget 2025 UK | Car Tax Changes 2025 UK | Big Car Tax Changes Coming to UK 2026 | Car Tax Changes 2026 UK.

Capital Allowances: Extended for EVs

The 100% first-year capital allowance for businesses purchasing low-emission vehicles (up to 50g/km CO2) was extended. Businesses can continue to deduct the full purchase cost of qualifying EVs and vans from taxable profits in the year of purchase. This is a significant tax planning tool for businesses and helps maintain the financial case for electric company cars and commercial fleets.

HGV Road User Levy

The HGV Road User Levy was maintained at current rates. The levy on heavy goods vehicles over 12 tonnes has been in place since 2014 and contributes to the maintenance of the strategic road network. Fleet operators continue to pay this charge alongside VED for goods vehicles.

What Was Not Mentioned

The Budget did not announce any concrete plans for road pricing despite ongoing government interest. The Treasury continues to monitor the transition to electric vehicles and the impact on VED revenues. The government has stated it will not introduce road pricing without consulting widely — but no formal consultation has been launched as of the 2025 Budget.

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 2025?
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 2025?
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.

Car Tax and the Budget 2025 UK: What the Chancellor Announced