Delhi increases road tax for luxury cars, high-end bikes

Delhi is all set to increase the road tax for luxury cars and high-end bikes. The Delhi cabinet today decided to raise the vehicles' road tax rates in an effort to generate additional revenue for the city government.

According to the new road tax rates, two-wheelers priced up to Rs.25,000 will be charged the existing two percent, while two-wheelers costing between Rs.25,000 and Rs 40,000 will now be liable for four percent road tax and those above Rs 40,000 will be charged six percent.

The road tax rates, for cars priced up to Rs 6 lakh, has been doubled to four percent and the tax rate for cars priced between Rs.6 lakh and Rs.10 lakh has gone up to seven percent. Those owning motor vehicles costing Rs 10 lakh would have to pay a road tax of 10 percent.

The new road tax rate will become effective after the issue of a notification.

This measure has also been taken to restrict the purchase of luxury cars and discouraging use of private vehicles in the city, Chief Minister Sheila Dixit said in an interview.

"The rates have been rationalised to also enhance revenue generation," she said, adding rationalisation of road tax was needed to replace the rates existing for decades.

Dixit also said that the new rates were rationalised in such a way that there will be marginal effect on purchase of two-wheelers and non-luxury cars.

However, the chief minister said the cabinet decided to continue the prevalent rates on public utility vehicles, including public goods careers, as it would have negative effect on common man.