The Karnataka Motor Vehicle Taxation (Amendment) Act, 2024, recently signed into law by Governor Thaawarchand Gehlot, introduces significant changes in vehicle taxation.
Under the new legislation, a 3% additional cess will be imposed on newly registered transport vehicles, including taxis, buses, and auto-rickshaws. This move aims to fund the Karnataka Motor Transport and Other Allied Workers Social Security and Welfare Fund.
Lifetime Tax on Electric Vehicles (EVs)
Another notable provision of the amendment empowers the state government to levy a lifetime tax on electric vehicles (EVs) costing over Rs 25 lakh. These EVs, such as motor cars, jeeps, omnibuses, and private service vehicles running on electricity, will incur a tax of 10% of the vehicle’s cost at the time of registration. While Karnataka initially exempted EVs from road taxes in 2016, this amendment marks a shift in policy.
As per data, Karnataka impose highest road tax in India, which goes up to 20% in some cases. An official said, “At present, we are imposing 11% cess, including 10% infrastructure cess and 1% urban transport cess.”
