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.

Road Tax Bands Explained 2026

UK road tax is organised into CO2 emission bands labelled A through M. Understanding which band your vehicle falls into — and how that band is determined — is essential for calculating your VED costs accurately. The banding system applies to all cars registered from March 2009 onwards, and the band assigned at first registration is permanent for the life of the vehicle. This guide provides a comprehensive explanation of the VED band system, from how bands are determined to how to find your vehicle's band.

The 13 VED bands explained

The CO2-based VED system for cars uses 13 bands, labelled A through M. Each band corresponds to a specific range of CO2 emissions in grams per kilometre (g/km), and each band has an associated first-year VED rate. The bands are: Band A (0-100g/km): 0 GBP first-year; Band B (101-110g/km): 20 GBP; Band C (111-120g/km): 30 GBP; Band D (121-130g/km): 130 GBP; Band E (131-140g/km): 165 GBP; Band F (141-150g/km): 165 GBP; Band G (151-165g/km): 190 GBP; Band H (166-175g/km): 215 GBP; Band I (176-185g/km): 230 GBP; Band J (186-200g/km): 255 GBP; Band K (201-210g/km): 290 GBP; Band L (211-225g/km): 330 GBP; Band M (226g/km+): 2,605 GBP first-year.

How the band is determined

Your vehicle's VED band is determined by its CO2 emissions figure at the point of first registration. This figure is measured during the official WLTP (Worldwide Harmonised Light Vehicles Test Procedure) test for vehicles registered from September 2018 onwards, or the older NEDC (New European Driving Cycle) test for vehicles registered before that date. The WLTP figure is typically 15-25% higher than the equivalent NEDC figure for the same vehicle due to the more rigorous testing protocol. The measured CO2 figure is printed on your Vehicle Registration Certificate (V5C) in section 6.1, and this figure determines the band permanently.

Where to find your CO2 figure

There are several ways to find your vehicle's CO2 emissions figure. The most reliable is your V5C registration certificate — section 6.1 shows the CO2 figure in g/km. If you have the vehicle's MOT certificate, this also records the CO2 figure. Your vehicle's manufacturer specification document (available from the dealer or manufacturer's website) lists the official WLTP or NEDC CO2 figure. You can also use the DVLA's vehicle enquiry service at check-vehicle-tax.service.gov.uk, which will show your vehicle's tax status and details including the CO2 figure on record. Related: UK Road Tax Bands 2026 | UK Road Tax Bands 2026 | UK Road Tax Bands 2026 | Andhra Pradesh Road Tax Calculator 2026 — AP Vehicle Rates.

WLTP vs NEDC: why it matters

WLTP (introduced September 2018) gives more realistic real-world CO2 figures than NEDC. If you are buying a used car registered before September 2018, the V5C may show an NEDC CO2 figure — which will be lower than the real-world figure. If you are buying a car registered from September 2018 onwards, the V5C will show the WLTP figure, which is more representative of actual driving emissions. When comparing vehicles across different registration years, be aware that an NEDC 120g/km car is roughly equivalent to a WLTP 145g/km car in real-world terms.

VED band quick reference

Band A (0-100g/km): 0 first-year VED — all pure electric vehicles qualify
Band B (101-110g/km): 20 first-year — most efficient petrol superminis
Band C (111-120g/km): 30 first-year — efficient 1.0-1.4L petrol cars
Band D (121-130g/km): 130 first-year — average family hatchback
Band E (131-140g/km): 165 first-year — larger family cars
Band F (141-150g/km): 165 first-year — medium SUVs and estates
Band G (151-165g/km): 190 first-year — above-average family cars
Band H (166-175g/km): 215 first-year — larger SUVs
Band I (176-185g/km): 230 first-year — executive saloons
Band J (186-200g/km): 255 first-year — large SUVs and performance cars
Band K (201-210g/km): 290 first-year — high-performance vehicles
Band L (211-225g/km): 330 first-year — sports cars and large 4x4s
Band M (226g/km+): 2,605 first-year + 690 GBP annual — highest-emission vehicles

Motorcycles use a different system

Motorcycles are not subject to the CO2-based banding system. Instead, motorcycle VED is based on engine capacity — under 150cc: 21 GBP per year; 150-400cc: 41 GBP per year; over 400cc: 59 GBP per year. Mopeds (under 50cc) pay 12 GBP per year. This system has no first-year rate — the standard annual rate applies from the first registration. Electric motorcycles are assessed by DVLA on a case-by-case basis but typically fall in the lowest band.

Disclaimer

VED band rates are based on UK government policy as of April 2026. Always verify your vehicle's exact band and rate at gov.uk/vehicle-tax-rate-tables. This article does not constitute financial or tax advice.

Official Resources: Vehicle Tax Guide | Car Tax Calculator

Frequently Asked Questions

Q: How is car tax calculated in 2026?
Car tax is calculated based on your vehicle's value, engine capacity, fuel type, emissions, and state or country of registration. Tax rates vary significantly between regions — check your local transport authority website or use an online car tax calculator for an accurate estimate for your specific vehicle.

Q: Can I pay my car tax online?
Yes — most regions allow online road tax payment through their transport department portal. In India, use parivahan.gov.in. In the UK, use gov.uk. In the USA, check your state's DMV website. Have your vehicle registration number and insurance certificate ready for online payments.

Q: What happens if I don't pay car tax?
Driving without valid road tax is illegal in most jurisdictions and can result in fines, vehicle seizure, or number plate clamping. Penalties range from a percentage of the tax owed to fixed daily amounts. Always ensure your vehicle is taxed before driving — even short lapses can accumulate significant penalties.

Q: Are there tax exemptions for electric or hybrid vehicles?
Most countries offer tax benefits for EVs and hybrids including reduced GST/VAT rates, road tax exemptions, and purchase subsidies. In India, EVs attract 5% GST versus 28% for petrol cars. In the UK, EVs are exempt from VED. Check your country's specific EV incentive programs for current rates and eligibility.

Q: Can I claim tax relief on car expenses for business use?
Business vehicle owners can typically claim deductions for fuel, maintenance, insurance, depreciation, and interest on car loans. Methods vary: standard mileage rates, actual expense tracking, or lease deduction. Keep detailed records including mileage logs, receipts, and business purpose documentation for all trips.