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: New vs Used Cars UK 2026 — Which Works Out Cheaper?

When choosing between a new and used car, road tax is one of many costs to compare. The VED implications differ significantly between the two, and understanding them helps you make a financially sound decision.

New Cars: First-Year VED

New cars pay the first-year VED rate — which can be substantial. A new petrol family car emitting 140g/km pays £340 for the first year. A high-CO2 diesel SUV at 200g/km pays £1,565. These first-year costs are factored into the on-the-road price by dealers. Used cars that are past their first-year period pay only the standard £190 annual rate — making them significantly cheaper on VED over the ownership period.

Used Cars: Standard Rate from Year Two

A used car that is two or more years old is already past the first-year period and pays the standard £190 annual VED (or £10 for an EV). Over a five-year ownership period, a used car costs £950 in road tax versus £1,890 for a new petrol car (first year at £340 plus £1,550 over four years of standard rate). The VED saving on used cars accumulates meaningfully over longer ownership periods.

Low-CO2 Used Cars: Even Better

An electric or low-CO2 used car combines the benefit of low VED with the absence of first-year costs. A three-year-old used EV paying £10 per year for five years costs £50 in total VED. Compare that to a new EV paying £0 first year and £420 per year for five years — £2,100 total including the premium rate. Used EVs offer dramatically lower lifetime road tax costs than new EVs subject to the premium rate. Related: Car Tax | New Vs Used Car Uk | Car Tax Check Before Buying Used Car UK 2026 | Car Tax Checklist When Buying Used UK 2026.

Premium Rate and Used Car Value

Premium rate surcharges (£410 per year on top of standard rate) only apply for years two through six of the vehicle's life. This means the premium rate applies to both new and used cars in years two through six of their life — but a used car that is past year six no longer pays the premium. A six-year-old premium car costs £190 per year VED, the same as any other petrol car. The premium rate is effectively a six-year cost, shared by both new and used buyers in the relevant period.

Lifetime VED Cost Comparison

For a typical driver keeping a car for five years: a new petrol car costs approximately £1,890 in VED over five years (first-year £340 + four years standard £1,550). An equivalent used petrol car bought at three years old costs approximately £570 over five years (five years standard rate at £190 × 3). Use the car tax calculator at Cartax.online to model specific vehicles and ownership periods.

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.