Road tax is the tax that needs to be paid on your motor vehicle (both for a four-wheeler and Truck-wheeler) for using roads. This tax is applicable on private and commercial vehicles. It is levied by the central government, state government as well as local authorities.
The tax has to be paid at the time of registering your vehicle, and also after it, either on a yearly basis or just once, as lifetime tax, according to the respective state government. If you use the vehicle in a state other than the one where it was registered, you may have to pay the lifetime tax again in the state where you use the car. You would also need to pay the state entry tax. All road taxes after registration need to be paid at the regional transport office (RTO) in your area.
Road tax is calculated as a percentage of the ex-showroom price of the vehicle, and also takes into account the age, seating capacity and weight of the vehicle. Rates differ across states, both at the time of registration and after that. For instance, in All State, it is 10% for (both for a four-wheeler and Truck-wheeler) Vehicle that cost up to 10 lakh (15% otherwise). Rates also depend on the age of the vehicle. Road tax at the time of registration would include value-added tax (VAT), excise duty and sales tax.
The tax is lower for petrol and CNG Gas vehicles than for diesel vehicles. For instance, in Delhi, road tax for petrol cars is 4% and 5% for diesel cars (for cars up to 6 lakh). In Karnataka, the rate is 15% for all cars up to 5 lakh.
Road tax for older vehicles is different. For example, in Tamil Nadu, at the time of re-registration, the rates vary from 6% to 8.75% depending on age of vehicle. Some states also levy a green tax, mostly on commercial vehicles that are older than 15 years.