Road tax is the mandatory fee that every car owner in Chandigarh must pay to support and improve the city’s roads and transportation network. It is levied in accordance with the Motor Vehicles Taxation Act (Punjab Act, 1924), as applied to the UT.
Such revenue is spent on the development of roads, traffic lights, streetlights, and other transportation infrastructure. This tax is payable by all vehicles (both private and commercial) registered in Chandigarh, as per the law.
Owners must be aware of the tax calculation, existing rates, and alternatives to paying taxes to ensure compliance and avoid penalties. Read further to find out the recent road tax rates and protocols of Chandigarh.
What is Road Tax and Why is it Important?
Road tax is an obligatory state/UT tax on road vehicles in use. It is levied as a lump sum or periodic fee under the Motor Vehicles Act and must be paid at the time of registration or at the yearly rate for commercial vehicles.
The road tax is one of the sources of financial resources allocated to maintain and develop road and highway infrastructure, and to make the travelling process safer and more efficient. It also supports public transport projects and traffic management.
Importance of Road Tax
- Infrastructure Development: Road tax money is utilised in the construction of new roads, repairing highways, and maintaining bridges in Chandigarh.
- Safety & Facilities: Streetlights, traffic lights, road signs and emergency services are provided at the expense of the tax revenue to ensure safer travel.
- Public Transport Support: Road tax helps fund the public transport system (such as buses) and other transportation projects in the UT.
- Legal Compliance: According to the Motor Vehicles Act, road tax has to be paid. Its evasion may result in fines or vehicle confiscation.
- Environmental Incentives: The system promotes cleaner vehicles by adjusting the tax rate according to the fuel type.
Road Tax Rules in Chandigarh
The rules governing road tax in Chandigarh are outlined in the Punjab Motor Vehicles Taxation Act of 1924, as enacted by the UT Transport Department. This tax is single on the registration of private vehicles and repetitive on commercial vehicles.
The latest amendments to the rates were made on July 11, 2023. Road tax will be payable by all vehicles in accordance with the relevant slab; different regulations will apply to vehicles imported into the UT.
Applicability of Road Tax in Chandigarh
- Two-Wheelers: This includes new bikes/motorcycles, where the ex-showroom price for two-wheelers up to ₹1 lakh is 8%, and 10% if above ₹1 lakh.
- Four-Wheelers (Private Use): Includes new cars, with a tax rate of 10% for those costing up to ₹15 lakh and 12% for those above ₹15 lakh.
- Commercial Vehicles: This category includes taxis, buses, goods transport vehicles, and delivery vans, which are subject to a separate tax.
- Electric/Battery Vehicles: In Chandigarh, battery-operated electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) are fully exempt from road tax under the current EV policy.
Factors Affecting Road Tax Rates
Key factors that determine the road tax in Chandigarh include:
- Vehicle Type: Two-wheeler, car/SUV, taxi, bus, truck, etc. Commercial vehicles have different rates or recurring schedules.
- Purpose of Use: Private vehicles pay a one-time lump sum, whereas commercial or transport vehicles pay periodic tax.
- Ex-Showroom Price: A higher-priced car or bike attracts a higher tax.
- Engine Capacity: A larger engine displacement typically results in a higher tax.
- Seating Capacity: Important for trucks and buses. Heavier or higher-capacity vehicles are subject to higher fees.
- Age of Vehicle: Older vehicles are often taxed less under depreciation rules; however, since Chandigarh uses a one-time tax, this mainly affects scenarios involving resale or transfer.
- Fuel Type: Electric and hybrid vehicles are eligible for significant tax rebates or exemptions. Diesel vehicles do not get special relief.
Lifetime Tax, Green Tax, and Exemptions
- Lifetime Tax: Private vehicles in Chandigarh pay a one-time “lifetime” road tax at first registration. This single payment covers the vehicle’s registration period. Commercial vehicles continue to pay yearly or quarterly taxes, rather than a lump sum.
- Green Tax: As noted, there is no separate green tax charged on older vehicles in Chandigarh.
- Exemptions: Certain vehicles are fully or partially exempt from road tax under Chandigarh rules:
- Electric/Hybrid Vehicles: 100% exemption through March 2028 under the UT EV policy.
- Agricultural Use: Vehicles used solely for farming/agriculture are exempt.
- Government Vehicles: Union, State or Municipal government vehicles are typically exempt.
How to Calculate Road Tax in Chandigarh?
Chandigarh road tax is calculated based on various factors, including vehicle category, engine capacity, fuel type, ex-showroom price, vehicle age, and weight for commercial vehicles. Rates and exemptions vary depending on these parameters.
Parameters Used for Road Tax Calculation
The table below discusses the standard parameters used for road tax calculation:
| Factors | Description |
| Vehicle Type | Two-wheeler, car, SUV, bus, truck, etc., each in its own tax slab. |
| Engine Capacity | Larger engines often mean a higher price & tax. |
| Vehicle Weight | Gross Vehicle Weight (GVW) or curb weight |
| Vehicle Age | Not used in the basic tax formula. |
| Fuel Type | Electric or hybrid vehicles get huge rebates. |
| Registration Location | State, district, or region-specific rates |
| Vehicle Cost/Value | The base price of the car determines the percentage slab. |
Sample Road Tax Calculation for Different Vehicles
Here are some examples to illustrate Chandigarh’s tax rates:
| Vehicle Type | Price | Tax Rate | Road Tax Payable |
| Diesel SUV | ₹15,00,000 | 10% | ₹1,50,000 |
| Luxury Car | ₹20,00,000 | 12% | ₹2,40,000 |
| Electric Car | ₹12,00,000 | Normal rate 10% for ₹1,20,000, but 100% exempt | ₹0 |
Note: These examples use the current rates (10% up to ₹ 15 lakh, 12% above). Actual payable tax may include the fixed surcharges (₹2000 extra) and vary for older or imported vehicles.
How to Pay Road Tax in Chandigarh?
Chandigarh offers both online and offline payment options for road tax.
Online Payment Process
- Step 1: Go to the official Parivahan website, and choose “Online Services” and then “Vehicle Related Services.”
- Step 2: Choose “Chandigarh” as the state, enter your vehicle registration number and RTO region, and click “Proceed.”
- Step 3: Under “RC Related Services,” select “Pay Your Tax” (or “Pay Vehicle Tax”). The portal will display the calculated tax and extra charges.
- Step 4: Confirm your chassis number, insurance status and all vehicle details on the screen.
- Step 5: Choose a payment method (net banking, debit/credit card or UPI) and complete the transaction.
- Step 6: After payment, download or print the e-receipt as proof. The system will automatically forward payment information to the RTO for verification.
These steps enable you to pay quickly and securely from home. For out-of-state vehicles (NCR permit), select the appropriate category.
Offline Payment Process
- Step 1: Go to the nearest Chandigarh RTO or License office during working hours.
- Step 2: Request the road tax payment challan from the RTO staff.
- Step 3: Complete the form with vehicle and owner information as prompted. Attach all required documents.
- Step 4: Hand over the form and documents to the RTO official. Pay the tax amount in cash at the counter.
- Step 5: The clerk will process the payment and issue a receipt with a stamp. Keep this as proof of tax payment.
Offline payment is helpful if you face any issues online or prefer in-person service. You will need to carry originals (plus copies) of all supporting documents. After payment, make sure the tax is duly noted on your RC.
Documents Required for Road Tax Payment
Whether paying online or offline, you generally need the following documents to pay road tax in Chandigarh:
- Vehicle Invoice: Original sale invoice.
- Registration Certificate (RC): Valid RC of the vehicle.
- Insurance Certificate: Valid motor insurance policy or cover note for the vehicle.
- PUC Certificate: Valid Pollution Under Control certificate.
- Address Proof: Valid address proof (Aadhaar, passport, voter ID, utility bill, etc.).
- ID Proof: Government photo ID (Aadhaar card, passport, etc.) of the owner.
- No Objection Certificate (NOC): If the vehicle was previously registered in another state, produce the NOC from that state. Additionally, Form KMVT-14 (from the previous RTO) is required for interstate transfers.
Having all these documents ready ensures a smooth payment process. For online payment via Parivahan, you may need scanned copies of some of these documents (the portal will prompt you to upload them). For offline, you submit photocopies.
Penalties for Late Payment of Road Tax in Chandigarh
Chandigarh imposes strict penalties for late road tax payments. If you miss the due date (typically 30 days from registration), you must pay the tax plus penalties:
| Delay Period/Situation | Penalty Rate/Fine |
| Delay in payment (general) | 0.5% of the unpaid tax for each day of delay, capped at 100% of the original tax |
| First-time offence | Minimum penalty of ₹10,000 |
| Repeat offence | Minimum penalty of ₹25,000 |
| Prolonged default or continued non-payment | Additional interest of approximately 1.5% per month on unpaid dues; vehicle may be impounded or legal action initiated |
In practice, pay the road tax promptly (within 30 days of registration) to avoid these hefty charges.
Refunds and Road Tax Transfer Rules in Chandigarh
Chandigarh allows pro-rated refunds of road tax in some instances.
Conditions for Road Tax Refund
- Vehicle Sold: If you sell a vehicle registered in Chandigarh, the new owner does not pay fresh tax – the original tax remains valid for the remaining period. Only a nominal transfer fee is charged.
- Interstate Transfer: If you move the vehicle out of Chandigarh permanently (and re-register in another state), you can claim a refund of the unexpired portion of the road tax.
- Scrapping/Disposal: If the vehicle is scrapped before its registration expires, you may also be eligible for a refund on the remaining years.
Procedure for Applying for a Road Tax Refund/Transfer
To claim a refund or transfer in Chandigarh:
- Step 1: File Form VT-33 at the Chandigarh RTO and submit the documents: the original tax payment receipt, RC copy, and a scrapping certificate or NOC for interstate transfer.
- Step 2: The RTO will verify the documents, calculate the refundable amount, and issue the refund by bank transfer within about 30 days.
Always keep a copy of the acknowledgement slip until the refund is processed.
Comparison: Road Tax in Chandigarh vs Other States
Chandigarh’s road tax rates compare with neighbouring regions as follows:
| State | Road Tax for Car (₹10L) | Electric Vehicle Tax |
| Chandigarh | ₹1,00,000 – ₹1,20,000 (10–12%) | Exempted (100%) till March 2028 |
| Karnataka | ₹1,30,000 – ₹1,80,000 (13–18%) | Exempted (for 1st registration) |
| Maharashtra | ₹1,10,000 – ₹1,30,000 (11–13%) | Exempted (100%) |
| Tamil Nadu | ₹1,00,000 – ₹1,50,000 (10–15%) | Exempted (100%) till 2025 |
Note: Road tax rates are approximate and may vary based on specific vehicle details and RTO assessments. Always consult the respective state’s RTO for precise calculations.
Road tax in Chandigarh is crucial for funding and maintaining the city’s road network. The tax you pay depends on your vehicle’s type, usage and price, and can be settled conveniently online via the Parivahan portal or offline at the RTO.
By understanding the applicable rates, deadlines, and exemptions, Chandigarh vehicle owners can stay compliant, avoid penalties, and even claim refunds when eligible.
FAQs about Road Tax in Chandigarh
Q. Are electric vehicles (EVs) eligible for road tax rebates in Chandigarh?
Yes. Under the UT’s EV policy, battery-operated and plug-in hybrid vehicles get a complete waiver of road tax (and registration fee) through March 17, 2028.
Q. Do I need to pay road tax again when transferring ownership within Chandigarh?
No. Since private cars in Chandigarh are subject to a one-time, lifetime tax at registration, transferring the vehicle to a new owner within the UT does not require additional road tax.
Q. Is road tax refundable if I move my vehicle to another state?
Yes. If you permanently relocate and re-register the vehicle outside Chandigarh, you can apply for a pro-rata refund of the unutilized road tax. You must surrender the RC and original tax receipt, and submit a No Objection Certificate from Chandigarh.
Q. How is road tax calculated in Chandigarh?
Road tax is calculated as a fixed percentage of the vehicle’s ex-showroom price (plus flat cess). Commercial vehicles and heavier vehicles are taxed based on their weight or seating capacity according to fixed schedules.
Q. What documents are required to pay road tax in Chandigarh?
You will typically need: the vehicle’s sales invoice, Registration Certificate (RC), valid insurance copy, Pollution Under Control (PUC) certificate, owner’s ID proof, and address proof.
If the vehicle is from another state, you also need the No Objection Certificate (NOC) and Form KMVT-14 from the previous RTO. Having all documents handy (or scanned for online payment) ensures a smooth tax payment process.
