T.N. Assembly | Vehicles to cost more, as Bill adopted to increase rate of life tax

TN govt hikes life tax for vehicles; Bill amending Motor Vehicles Taxation Act passed in Assembly. New two-wheelers, four-wheelers, carriages to cost more; life tax rate for new vehicles >₹1L, ₹20L, ₹10L, ₹5L set at 12%, 20%, 18%, 13% respectively. Green tax of ₹1.5K for 5 yrs for vehicles >15 yrs old, ₹750 for 5 yrs for motorcycles >15 yrs old, ₹750/annum for transport vehicles >7 yrs old, ₹250/annum for autorickshaws. Govt seeks to augment financial resources of State exchequer.

The cost of new and old two-wheelers, four-wheelers, good carriages and other vehicles is set to increase, as the Tamil Nadu government has decided to hike the rate of life tax of these vehicles, after a decade.

A Bill amending the Tamil Nadu Motor Vehicles Taxation Act, 1974 to this effect, was adopted by the Legislative Assembly on Wednesday, October 11, 2023.

According to the legislation, the rate of life tax for a new motorcycle would be 12%, if its total cost exceeds ₹1 lakh and 10%, if its total cost does not exceed ₹1 lakh.

In case of new cars and other new motor vehicles, the rate of life tax would be 20% if the cost of the vehicle exceeds ₹20 lakh. For new cars and other new motor vehicles whose costs are between ₹10 lakh and ₹20 lakh, the rate of life tax would be 18% and for vehicles costing between ₹5 lakh and ₹10 lakh, it would be 13%. In case of vehicles costing below ₹5 lakh, the rate of life tax would be 12%.

The Bill, tabled by Transport Minister S.S. Sivasankar, also provided for different rates of life tax for old two-wheelers and other vehicles depending on how many years old they are. It also provides revised rates of life tax for tourist motor cabs and construction equipment vehicles, among others.

The Bill also specified a green tax of ₹1,500 for five years for motor vehicles (other than transport vehicles) that have completed 15 years from the date of their registration. For motorcycles that have completed 15 years since their registration, the green tax would be ₹750 for five years.