Last updated: September 2026 – checked against current road tax and green tax rules.
Road tax, often called Vahan tax or E-Vahan tax, is a state-level tax every vehicle owner in India pays, usually at the time of registration. This guide explains how it’s calculated, who’s liable, what documents you need, what happens if you miss it, and the separate green tax that applies to older vehicles.
What Is Vahan (Road) Tax?
Road tax is a state tax on vehicle ownership, collected mainly to fund road construction and maintenance. For private vehicles, it’s typically paid as a lump sum at registration, covering the vehicle for a set number of years (often up to 15 years); for commercial vehicles, it’s more commonly paid annually or quarterly. Because it’s a state subject, both the rate and how it’s structured vary from state to state, so the same car can attract quite different tax depending on where it’s registered.
How Is Vahan Tax Calculated?
Most states calculate road tax as a percentage of the vehicle’s ex-showroom price, adjusted by factors including:
Commercial vehicles generally pay higher rates than private vehicles, since they use the roads more intensively, and higher-cc or higher-value vehicles pay proportionally more. Because rates genuinely differ by state, always confirm the exact figure on your state’s transport department website or the Vahan portal’s tax calculator rather than relying on a fixed percentage. As a general pattern, many states charge somewhere in the range of 7% to 15% of the ex-showroom price for private cars, with higher-value vehicles often facing a steeper slab, but treat this only as a rough sense of scale rather than a number to rely on for your own vehicle.
Who Is Liable To Pay Vahan Road Tax?
Every vehicle owner is liable to pay road tax, collected at registration and, for commercial vehicles, renewed periodically. If you buy a vehicle registered in a different state and move it permanently, you’ll typically need an NOC and may owe the difference in tax between the two states when re-registering.
What Happens If You Don’t Pay on Time?
Late or unpaid road tax can attract a penalty, which varies by state and can be a significant multiple of the original amount for long delays. An outstanding balance can also block services like RC renewal, and repeated non-payment can escalate to the vehicle being flagged for enforcement action.
Documents Needed for Tax Payment
How To Pay Vahan Tax Online
Some states also run their own transport department portals for tax payment alongside Vahan; either works, since they draw from the same record.
Green Tax on Older Vehicles
Green tax (also called an environmental compensation charge) is now an active policy, not just a proposal: transport (commercial) vehicles older than 8 years and personal vehicles older than 15 years are charged an additional amount, typically 10% to 25% of the road tax, rising to as much as 50% in heavily polluted cities. It’s collected at the time of fitness certificate renewal for commercial vehicles, or RC renewal for private vehicles, and the RTO won’t process either without it being paid.
Exemptions generally include electric vehicles, and often CNG, LPG and hybrid vehicles, along with farm vehicles like tractors, though exact exemptions can vary by state. If you’re keeping an older vehicle past these age thresholds, budget for this charge; if you’re considering scrapping it instead, our vehicle scrapping guide covers the process and any incentives available. Some states also offer a discount on registration tax for a new vehicle if you scrap an old one under the National Vehicle Scrappage Policy, which is worth weighing against simply paying the green tax and continuing to use the older vehicle.
Frequently Asked Questions
What’s the difference between road tax and GST on a vehicle?
GST is a central tax charged at the time of purchase, included in the vehicle’s price. Road tax is a separate state tax charged for registering and owning the vehicle.
Can I pay Vahan tax online?
Yes, through the Vahan portal or, in many states, the state transport department’s own portal.
How often do I need to pay road tax?
Private vehicles typically pay a one-time lump sum covering up to 15 years at registration. Commercial vehicles usually pay annually or quarterly. This varies by state, so check your RC or state transport department for the exact schedule.
Do electric vehicles pay road tax and green tax?
Most states offer reduced or zero road tax for EVs to encourage adoption, and EVs are typically fully exempt from green tax. Check your specific state’s current EV incentive policy, since these are periodically revised.
Is road tax refundable if I move my vehicle to another state?
Often yes, for the unused portion of the lump-sum tax already paid, once the vehicle is re-registered in the new state and the original state confirms the deregistration. The exact refund process and amount depend on the original state’s rules, so check with that state’s transport department.
Related guides: Vahan E-Services, Vahan Fitness Certificate, Vahan Application Status.