Road tax is a one-time state government levy paid when a new car is registered, calculated as a percentage of its ex-showroom price. Rates in India range from about 4% to over 20% depending on the state, the car's price slab and its fuel type, making road tax the single biggest addition to your on-road price.
How it works
Each state publishes its own slab structure: the percentage usually rises with the car's ex-showroom price, and many states charge diesel cars more than petrol. Several states waive or sharply discount road tax for electric vehicles to push adoption. The dealer pays the tax to the RTO on your behalf during registration, and it appears as one line in your on-road quotation — the on-road price explainer shows where it sits in the breakup. Our city-wise prices are computed from each state's published slabs; the exact method is documented on our methodology page.
Why it matters when buying
Because slabs are price-banded, a variant that crosses a slab boundary can attract a higher percentage on the entire amount — occasionally making a slightly costlier variant disproportionately expensive on-road. It also means the same car is genuinely cheaper to buy in some states than others.
A concrete example
A petrol car with an ex-showroom price of ₹10 lakh in a state charging 12% for that slab pays ₹1,20,000 as road tax. The identical car in a state charging 8% pays ₹80,000 — a ₹40,000 difference before you've compared a single feature.