Tamil Nadu Transport Department Plans Tax Hike, Two-Wheeler and Car Prices Set to Rise
Posted on: 20/Jun/2023 2:29:30 PM
The Tamil Nadu transport department is set to raise motor vehicle taxes, leading to a 5% price increase for new two-wheelers and cars. The current road tax rates for motorcycles and cars, unchanged since 2008 and 2010 respectively, will be revised to align with vehicle costs.
Under the proposal, two-wheelers below Rs 1 lakh will face a 10% tax, while those above Rs 1 lakh will be taxed at 12%. Cars priced up to Rs 10 lakh will incur a 12% tax, while rates for cars between Rs 5 lakh and Rs 10 lakh will be set at 13%. Cars priced from Rs 10 lakh to Rs 20 lakh will face a 15% tax, and those above Rs 20 lakh will be taxed at 20%.
The tax revision aims to address disparities in tax brackets and is projected to generate an additional Rs 1,000 crore in annual revenue for the transport department. Consumers can expect a price increase of around Rs 7,000 to Rs 8,000 for 150cc bikes and up to Rs 30,000 for affordable cars below Rs 10 lakh.
The tax hike, based on the principle of higher taxes for those purchasing expensive vehicles, is expected to bring greater fairness to the taxation system. The proposal awaits an official notification, and taxes for commercial vehicles and other categories are also expected to increase.
