What Is the Difference Between Toll and Road Tax?

What is Road Tax?

At the time of registration, state governments impose a fee on car owners known as road tax. The money raised goes towards road construction, maintenance, and infrastructure initiatives throughout the state. All motor vehicles, including cars, lorries, buses, and two-wheelers, are subject to this tax, regardless of whether they are being used for personal or professional reasons.

 

Why is Road Tax Important?

Without road taxes, governments would find it difficult to construct new roads, maintain existing ones, and provide efficient transportation systems. It is essential for increasing connection and making roadways safer for both pedestrians and vehicles.

 

Factors Affecting Road Tax in India

Road tax rates are determined by a number of criteria, including:

 

• Type of vehicle: Private or commercial

   

• Engine capacity: More taxes are applied on higher CC engines.

   

• Fuel type: Electric, diesel, or petrol

   

• Cost of vehicle: Expensive vehicles are classified under higher tax slabs.

   

• State of registration: Each state has a different road tax rate.

 

An automobile registered in Maharashtra, for instance, would be subject to 7–14% tax on its purchase price, whilst in Karnataka, the rate can reach 18%.

 

What is Toll Tax?

Vehicle owners must pay a toll tax to access certain highways, expressways, or bridges. The toll tax reimburses the construction and upkeep costs of these highways. Depending on the kind of vehicle and the distance driven, a predetermined fee must be paid when a vehicle enters a toll road.

 

Here are some key points to remember:

• Toll tax is only levied when you use certain highways, whereas road tax is required for all registered vehicles.

   

• Taxes can be paid electronically using FASTag or in person at toll booths.

   

• The Build-Operate-Transfer (BOT) model primarily utilises toll money for road development.

 

How is Toll Tax Calculated in India?

India's toll tax is determined by a number of factors:

• Road type: National highways have lower tolls than expressways.

   

• Vehicle type: Buses and large trucks pay more than light motor vehicles.

   

• Distance travelled: Higher tolls are associated with longer journeys.

   

• Government rules: Inflation-based rate revisions are made every year.

 

Example toll tax rates (2025):

• Mumbai-Pune Expressway: ₹320 (car), ₹685 (2-axle truck)

   

• Delhi-Meerut Expressway: ₹170 (car), ₹280 (LMV)

 

Toll prices are available at toll plazas or on the NHAI official website.

Toll Tax Rules in India

The National Highways Fee (Determination of Rates and Collection) Rules, which are administered by the Ministry of Road Transport and Highways (MoRTH), govern toll collection. Key rules include:

 

• FASTag must be mandatorily equipped on all four-wheelers.

   

• Vehicles can travel through a toll plaza without paying if there isn't a FASTag lane available.

   

• Every year, toll rates are changed in accordance with government regulations and inflation.

   

• With the exception of bridges, tunnels, and bypass highways, there are no tolls inside city boundaries.

 

Who is Exempt from Toll Tax?

In India, a number of cars and people are exempt from paying toll taxes, including:

 

• Emergency vehicles: Police vehicles, fire engines, and ambulances.

   

• Government officials: The President, Prime Minister, Governors, and Chief Ministers' vehicles.

   

• Defence vehicles: Officially deployed Army and paramilitary vehicles.

   

• Local residents: Individuals who reside within 20 km of a toll plaza (according to NHAI regulations).

 

Road Tax vs. Toll Tax: A Comparison
 

Factor	Road Tax	Toll Tax
Purpose	One-time tax for road infrastructure maintenance and development.	Recurring user fee for highway usage and maintenance.
Payment Frequency	Paid once at the time of vehicle registration or periodically.	Paid whenever using a toll road or bridge.
Applicability	Applicable to all registered vehicles.	Applicable only to vehicles using tolled roads or structures.
Governing Authority	State governments regulate and collect road tax.	National Highways Authority of India (NHAI) or private concessionaires collect toll tax.
Payment Method	Paid at RTOs, online portals, or state transport offices.	Paid at toll booths, via FASTag, or GNSS-based systems.
Variation	Varies based on state, vehicle type, engine capacity, and age.	Varies by road type, distance, and vehicle category.
Legal Framework	Governed by the Motor Vehicles Act, 1988, and state laws.	Governed by the National Highways Fee Rules, 2008, with amendments.

 

How Much is Road Tax in India?

Each state has a different road tax rate. Here is an estimate for significant states:

 

• Tamil Nadu: 10%-12% of the cost of the vehicle for new two-wheelers, 12%-20% for new cars.

   

• Karnataka: 4%-13% of the cost of the vehicle for new two-wheelers; 10%-18% for new cars.
  
   

• Maharashtra: 10%-20% of the cost of the vehicle for motor cycles, 11%-20% for motor cars.

   

• Delhi: ₹650-₹1,220 of the cost of the vehicle for two-wheelers, ₹3,815-₹7,020 for cars.

   

• Uttar Pradesh: 7%-10% of the cost of the vehicle for two-wheelers, 7%-10% for four-wheelers.

 

How to Pay Road Tax?

Road tax can be paid using:

 

• State Transport Department website: Online payments are accepted in most states.

   

• Parivahan Portal: You can pay road tax on MoRTH's consumer portal.

   

• RTO Offices: For payments and registrations made in person.

 

When making payments, be sure to have a valid ID, insurance information, and vehicle registration certificate (RC) with you.

 

Summing Up

Every car owner must be aware of the distinction between road tax and toll tax. While toll taxes are paid on a pay-per-use basis for certain roads and highways, road taxes are one-time fees that are applied to all cars for state-wide road infrastructure.

 

Obtaining Car Insurance is just as crucial as paying your road tax for a hassle-free driving experience. Shriram Car Insurance provides affordable yet comprehensive protection for theft, third-party liability, accidental damages, and more. With hassle-free claims, minimal paperwork, and dedicated customer support, Shriram Car Insurance provides defence against unforeseen costs, whether you're traversing on toll routes or inside city boundaries. Explore our plans today!

 

FAQs

1. Can I claim a refund on my road tax?

Yes, provided that the necessary paperwork is submitted and approved, you may request a refund from the transport department of your former state when you move, and re-register your car.

 

2. What happens if I don’t pay road tax?

Road tax nonpayment may result in penalties, litigation, or the RTO possibly seizing the car. Additionally, it could cause complications while renewing a vehicle's registration.

 

3. Do electric vehicles (EVs) have to pay toll tax?

While some states provide road tax exemptions for EVs, toll tax exemptions are contingent on certain government regulations and are not always granted to EVs.

 

4. How can I check toll rates for my route?

You can check toll rates at toll plazas, where the latest rates across different vehicle classifications are displayed, on the NHAI website or on the FASTag smartphone app.