Under the revised policy, vehicles under ₹10 lakh will attract a one-time lifetime tax of 5%. It replaces the earlier annual tax of ₹1,800. Vehicles costing between ₹10 and ₹15 lakh will have to pay a one-time lifetime tax of 9% and those above ₹15 lakh will face a 15% tax.
Additionally, electric vehicles priced above ₹25 lakh will now attract a 10% tax; they were previously exempt from road tax.
The state government also introduced other significant changes to the vehicle taxation structure.
Key updates include:
– Removal of ₹10 Lakh+ Cost Clause: Omission of the phrase “the cost of which exceeds ₹10 Lakhs” in Sections 3(1)(d) and 4(1) may reduce the tax burden for high-cost vehicles.
– Revised Lifetime Tax for Construction Equipment Vehicles: Tax rates vary based on vehicle age, ranging from 8% (new vehicle) to 25% (over 15 years).
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Updated Tax for Motor Cabs (Within Karnataka): It covers motor cabs except for those registered outside of Karnataka but using permits from Section 88(9) of the Motor Vehicles Act of 1988.
– Lifetime Tax for Motor Cabs:
– Cost ≤ ₹10 Lakhs: 10% lifetime tax
– Cost > ₹10 Lakhs but ≤ ₹15 Lakhs: 9%
– Cost > ₹15 Lakhs: 15% lifetime tax
– Electric Motor Cabs > ₹25 Lakhs: 10%
– Refund Provisions: Refunds for motor cabs will be provided based on vehicle age at deregistration, with a sliding scale from 93% (within 1 year) to 25% (14-15 years).
In September last year, CNBCTV18 reported that the state government was drafting a new electric vehicle (EV) policy targeted at strengthening the clean mobility sector over the next five years. The proposed legislation included major incentives for customers and manufacturers to position Karnataka as an EV industry leader.
The report mentioned that the draft policy included an exemption from road tax for electric and hybrid vehicles priced under ₹25 lakh to make EVs more accessible and attractive. The southern state aims to attract ₹50,000 crore investments in the clean mobility value chain by 2029.
(Edited by : Sudarsanan Mani)