Tax hike makes cars, 2-wheelers costlier in Punjab

Buying cars and two-wheelers in Punjab will cost more as the cash-strapped state government on Thursday hiked the motor vehicle tax by 0.5 to 1% point.

Buying cars and two-wheelers in Punjab will cost more as the cash-strapped state government on Thursday hiked the motor vehicle tax by 0.5 to 1% point.

Buying cars and two-wheelers in Punjab will cost more as the cash-strapped state government on Thursday hiked the motor vehicle tax by 0.5 to 1% point. (HT File)

According to the latest notification from the transport department, the new rates of motor vehicle taxes will be levied on the actual price of the vehicle, excluding taxes.

The hike comes just ahead of the festival season and comes close to the heels of a hike in collector rates.

According to new rates, tax on a four-wheeler costing up to ₹15 lakh has been raised from 9 to 9.5%, which means the price of a vehicle will increase by up to ₹7,500.

The price of a four-wheeler costing above ₹15 lakh but up to ₹25 lakh will go up by nearly ₹25,000 as the tax rate has been hiked from 11 % to 12%.

The department has added another category for vehicles costing above ₹25 lakh and 13% tax has been levied on it, as per the notification.

For two-wheelers costing up to ₹1 lakh, the motor vehicle tax has been increased by 0.5% to 7.5%.

The tax rate will be 10% if the price of a two-wheeler is above ₹1 lakh but not more than ₹2 lakh, as per the notification.

A two-wheeler costing above ₹2 lakh will attract 11% motor vehicle tax, as per the notification.

GFX:

Cars

Actual price New tax rate Price hike

Up to ₹15 lakh 9.5% Up to ₹7,500

₹15 lakh to 25 lakh 12% Up to ₹25,000

Above ₹25 lakh 13% Levied first time

Two-wheelers

Up to ₹1 lakh 7.5% Up to ₹7,500

₹1 lakh to ₹2 lakh 10% Up to ₹20,000

Above ₹2 lakh 11% Minimum ₹22,000