Buying a new car or two-wheeler in India often comes with more than just the ex-showroom price. Road tax, also known as motor vehicle tax or registration tax, is a mandatory one-time fee charged by state governments during vehicle registration. In September 2025, several states have revised their road tax slabs, impacting the overall cost of new vehicles. For new buyers, this change means higher on-road prices, making it essential to understand how much extra they may need to pay.
What is Road Tax and Why is it Important?
Road tax is a state-level levy collected at the time of registration. Its purpose is to fund road construction, highway maintenance, and infrastructure development. Each state in India decides its own slab, which is usually based on:
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Vehicle type (car, bike, commercial vehicle)
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Engine capacity (cc-based classification)
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Fuel type (petrol, diesel, CNG, EV)
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Vehicle cost (price bracket slabs)
The revised road tax 2025 India rules now mean that vehicle registration costs vary widely across states, directly influencing buyer decisions.
States That Announced Road Tax Hike in September 2025
Maharashtra
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Increased road tax by 2% on vehicles above ₹10 lakh.
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EVs continue to enjoy a 50% tax rebate, but hybrid cars now pay full road tax.
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Example: A petrol SUV priced at ₹15 lakh now attracts 13% tax instead of 11%.
Karnataka
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Revised slabs for all vehicles priced above ₹20 lakh.
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Luxury vehicles now pay 20% road tax, up from 18%.
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Two-wheelers below ₹1 lakh remain unchanged at 10%.
Delhi NCR
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Implemented a uniform 12% road tax on petrol and diesel cars.
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EV exemption continues till March 2026.
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CNG cars now attract 8% road tax, up from 6%.
Tamil Nadu
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Increased road tax on petrol cars above ₹8 lakh by 1%.
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Diesel vehicles face a higher hike of 2% due to emission concerns.
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Electric two-wheelers remain tax-free.
Uttar Pradesh
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Road tax revised for mid-range cars between ₹6–12 lakh from 9% to 10.5%.
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Larger SUVs now taxed at 14%.
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Agricultural vehicles exempt from the hike.
Revised Road Tax Slabs – September 2025
State |
Small Cars (
| Mid Cars (₹8–15 lakh) |
Luxury Cars (>₹15 lakh) |
EVs |
|---|---|---|---|---|
Maharashtra |
9% |
11% |
13% |
50% rebate |
Karnataka |
12% |
15% |
20% |
75% rebate |
Delhi NCR |
12% flat |
12% flat |
12% flat |
0% |
Tamil Nadu |
10% |
12% |
15% |
0% for 2W |
Uttar Pradesh |
8.5% |
10.5% |
14% |
50% rebate |
Impact on New Buyers in September 2025
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Higher On-Road Prices: Buyers need to budget an extra ₹30,000–₹1.5 lakh depending on car type.
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EV Advantage: States continue to promote electric vehicles through rebates. EVs remain cheaper to register compared to petrol and diesel cars.
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Luxury Car Owners Pay More: The sharpest hikes apply to high-end SUVs and sedans.
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Regional Variation: A car priced at ₹12 lakh can cost almost ₹50,000 more in Karnataka compared to Uttar Pradesh.
Tips for Buyers in September 2025
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Check State Rules: Road tax differs by state; always confirm before finalizing purchase.
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Consider EVs: Tax exemptions and rebates make EVs more affordable long-term.
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Buy Before Further Hikes: Some states are reviewing additional increases for 2026.
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Factor Into EMI: Include road tax while calculating loan EMIs to avoid financial stress.
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Explore Neighboring States: In some regions, buyers purchase and register vehicles in lower-tax states, though this requires compliance with RTO rules.
Conclusion
The road tax revision in September 2025 has made vehicles more expensive across several states. While EVs continue to enjoy rebates, petrol and diesel vehicle owners must pay higher registration costs. For new buyers, understanding the vehicle registration cost in their state is crucial before committing to a purchase. Planning smartly, comparing across states, and considering EV options can help minimize the financial impact.
FAQs
Which states increased road tax in September 2025?
Maharashtra, Karnataka, Delhi NCR, Tamil Nadu, and Uttar Pradesh have revised their slabs this month.
Are electric vehicles exempt from road tax?
Yes, in most states EVs enjoy either full exemption or significant rebates, especially for two-wheelers and entry-level cars.
How much more will a luxury SUV cost in September 2025?
In Karnataka, luxury cars above ₹20 lakh now attract 20% tax, which could add ₹3–4 lakh extra to the on-road price.
Can road tax be paid in installments?
No, road tax is a one-time payment made during vehicle registration.
Do all states follow the same tax rates?
No, each state has its own structure, leading to wide variations in final on-road prices.
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