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 When Selling Your Car UK 2026: Complete Seller Guide

Selling your car involves several road tax responsibilities that, if overlooked, can leave you liable for charges on a vehicle you no longer own. Understanding the tax transfer process protects sellers from unexpected bills and ensures buyers can tax the vehicle legally.

Road Tax Does Not Transfer to the Buyer

One of the most common misconceptions is that road tax transfers with the vehicle. It does not. Road tax is tied to the registered keeper, not the vehicle. When you sell your car, your VED is cancelled and any unused months are refunded automatically — but only when DVLA is notified of the change of keeper. This is why notifying DVLA promptly is critical.

How to Notify DVLA of the Sale

You can notify DVLA of a vehicle sale in two ways. The first is to give the buyer the green slip — part V5C/2 of your registration certificate — on the day of sale. The buyer uses this to tax the vehicle in their name. The second is to notify DVLA online at GOV.UK using the 'sold a vehicle' service, which requires your V5C reference number. Both methods are equally valid. If you use the online service, you do not need to send any part of the V5C to DVLA.

What Happens to Your Road Tax

Once DVLA processes the change of keeper, your road tax is cancelled automatically. Any full months of unused tax are refunded to the registered keeper — that is you. The refund is calculated from the date DVLA processes the notification, not the date of sale. Refunds typically arrive within four to six weeks via bank transfer if you provided bank details, or by cheque to the address on your V5C. Related: Car Tax When Selling Your Car UK 2026 | Car Tax Refund When Selling Your Car UK 2026 | Car Tax Refund When Selling Your Car UK 2026 | Car Tax Transferring UK 2026.

Do Not Tax the Car for the Buyer

Some sellers offer to tax the car for the buyer as part of the sale. While well-intentioned, this creates problems. The tax would be in the seller's name, meaning the buyer cannot drive legally and the seller remains liable. Instead, agree with the buyer that they will tax the vehicle using the green slip you provide. The buyer can tax immediately online at GOV.UK before driving.

SORN Automatically Applies After Sale

If you sell the vehicle and the buyer has not yet taxed it, a SORN is automatically applied to protect both parties. This means the vehicle cannot be driven on the road until it is taxed by the new keeper. The SORN remains in place until either the new keeper taxes it or the 14-day notification window expires. DVLA sends a confirmation letter when the SORN is applied.

Private Number Plates and Tax

If you are selling the car but keeping a private number plate, take the plate off the vehicle before the sale. You can transfer the number to a retention certificate online at GOV.UK. The vehicle's road tax is unaffected by the number plate — the V5C tracks the vehicle, not the registration mark. The new keeper will receive a new registration number with the vehicle.

Check Your V5C Is in Your Name Before Selling

If you bought the car and the V5C is still in the previous owner's name, you cannot legally sell it or notify DVLA of the sale. You must first register yourself as the keeper on the V5C before selling. This is a common issue with private purchases where the seller never sent the slip to DVLA.

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.