What Is Road Tax and Why Should You Care About Exemptions for EVs in India?
If you’re thinking of buying an electric vehicle (EV) in India, you might have heard that there are some road tax benefits or even full exemptions available. But what exactly is road tax, and why does it matter for EV owners like you?
Road tax, officially known as Motor Vehicle Tax (MVT) or Vehicle Registration Tax, is a state-government-imposed levy you pay when registering a vehicle. The amount depends on vehicle type, cost, fuel, and state. For petrol or diesel cars, this tax can range from 6% to even 20% of the car’s ex-showroom price.
EV adoption is being strongly pushed by both the Indian central government and individual states, which is why road tax exemptions are offered in many states to help you save big on your next electric car or two-wheeler.
- Road tax is a one-time payment or installment paid to the state RTO during vehicle registration.
- For conventional vehicles, this can add tens of thousands to lakhs to your upfront cost.
- Many Indian states are now giving full or partial road tax exemption to encourage EV purchases.
Did You Know?
Road tax on a mid-size SUV in Delhi can be as high as ₹2 lakh, but you can pay zero for an eligible electric vehicle in 2025 if state policy continues!
Why Do Indian States Offer Road Tax Exemptions for Electric Vehicles?
You might wonder, why are states offering you exemption or discounts on road tax if you buy an EV?
The key reasons are:
- To reduce air pollution, especially in cities like Delhi, Mumbai, and Bengaluru.
- Helping the central government reach the target of 30% EVs in new vehicle sales by 2030.
- To make EVs more affordable and narrow the upfront price gap versus petrol/diesel vehicles.
- To encourage automakers and startups to invest and manufacture EVs locally.
States are continuously updating their EV policies, and your savings can be significant just by choosing an EV over a fuel car.
Expert Insight
According to the Ministry of Road Transport & Highways (MoRTH), India’s 2025 EV market is expected to cross 1.5 million units. Road tax benefits are among the top three factors driving EV conversions for individual and fleet owners.
When Do Road Tax Exemptions Apply for EVs? Can You Avail Them in 2025?
If you’re buying an electric vehicle in 2025, you’re probably asking: Can I actually get a road tax exemption? Is it valid only for new vehicles, and does it apply to two-wheelers, cars, and commercial EVs?
Here’s what you need to know:
- Road tax exemptions are generally available only at the time of new vehicle registration, not on resale or transfer.
- Benefits apply to both electric two-wheelers and four-wheelers (private cars, autos, taxis, and commercial goods EVs).
- Most state exemptions are set to run until 2025 or 2026, but individual states may update their policy every few years.
- Some states require vehicles to be manufactured or assembled in India to qualify.
List of Timelines for Road Tax Exemption in Major States (as of 2025):
- Delhi: Exemption till 2026 for all new EV registrations.
- Maharashtra: 100% exemption for EVs registered by December 2025.
- Tamil Nadu: Extended 100% exemption till December 2025.
- Karnataka: Valid through December 2025 under the current policy.
- Telangana: Extended till 2025 for first 2 lakh EVs.
Did You Know?
Over 8 lakh EVs have registered in India with zero road tax between 2020-2025, saving Indian users an estimated total of ₹2,000 crores across all states!
Which States Offer 100% Road Tax Exemption for EVs in 2025?
Not all states have the same policy. So, where can you buy an EV in India in 2025 and pay zero road tax? Here’s a handy comparison for you:
| State | 2025 Road Tax Exemption | Type of Vehicles Covered | Validity | Additional Notes |
|---|---|---|---|---|
| Delhi | 100% | All EVs | Till Dec 2026 | Includes commercial vehicles |
| Maharashtra | 100% | All EVs | Till Dec 2025 | No upper limit |
| Tamil Nadu | 100% | All EVs | Till Dec 2025 | For first registration only |
| Karnataka | 100% | All EVs (private & commercial) | Till Dec 2025 | Battery swapping eligible |
| Telangana | 100% | All EVs | Till 2025 or limit fulfilled | First 2 lakh EVs |
| Gujarat | 50% | |||
| Punjab | 100% | All EVs | Till March 2025 | Modify after March 2025 |
| Rajasthan | 100% | All EVs | Till notification | Temporary arrangement |
| Odisha | 100% | All EVs | Till Dec 2025 | Renewable upon state notification |
| Kerala | 50% | All EVs | Till March 2025 | Can vary based on local updates |
| Uttarakhand | 100% | All EVs | Till March 2025 | Valid for all classes of EVs |
Summary of State Policies for EV Road Tax in 2025
- Delhi: Leading with 100% exemption for all classes of EVs, including commercial vehicles, valid till December 2026.
- Maharashtra & Tamil Nadu: Pure 100% exemption, valid till December 2025, applies to both personal and commercial electric vehicles.
- Karnataka & Telangana: Full exemption up to policy’s valid date or capped by vehicle numbers.
- Punjab, Rajasthan, Odisha, Uttarakhand: Full exemption generally, with expiry/renewal dates to be monitored.
- Gujarat & Kerala: 50% exemption in 2025, but may increase based on upcoming state announcements.
Expert Insight
Delhi and Maharashtra reported the highest EV sales growth in 2024 after extending road tax exemptions and additional perks, according to state transport departments.
How Do Road Tax Exemptions for EVs Compare Across Top Indian States?
If you’re weighing where to register your new EV, comparing states will give you a clear idea of potential savings. Here’s how the numbers look for a mid-segment electric car (~₹15 lakh ex-showroom):
| State | Typical Road Tax On ICE (₹, 2025) | EV Road Tax (₹, 2025) | Actual Savings (₹) | Special Notes |
|---|---|---|---|---|
| Delhi | 1,36,000 | 0 | 1,36,000 | 100% exempt all EVs |
| Maharashtra | 1,52,000 | 0 | 1,52,000 | 100% exempt till Dec 2025 |
| Karnataka | 1,45,000 | 0 | 1,45,000 | All EVs eligible |
| Tamil Nadu | 1,10,000 | 0 | 1,10,000 | Extended till Dec 2025 |
| Telangana | 1,30,000 | 0 | 1,30,000 | First 2 lakh EVs |
| Gujarat | 1,17,000 | 58,500 | 58,500 | 50% exemption |
| Odisha | 1,25,000 | 0 | 1,25,000 | Till Dec 2025 |
| Rajasthan | 1,38,000 | 0 | 1,38,000 | No upper cap |
| Punjab | 1,44,000 | 0 | 1,44,000 | All EVs till March 2025 |
| Kerala | 1,18,000 | 59,000 | 59,000 | Partial exemption |
Key Takeaways for State Comparison
- Choosing the right state for EV registration can save you between ₹1 lakh to ₹1.5 lakh for a typical electric car.
- In states like Gujarat and Kerala, the partial exemption is still robust but not as high as in Delhi or Maharashtra.
- Exemptions may be capped based on number of vehicles or dates, so always reconfirm with your local RTO.
Did You Know?
In Delhi, the EV registration ratio increased fivefold after 100% road tax exemption was introduced, according to Delhi EV Policy 2024.
What Types of Electric Vehicles Are Eligible for Road Tax Exemptions in India?
You might ask, does road tax exemption apply only to cars, or can you get the same for electric scooters, bikes, autos, taxis, and commercial EVs?
Good news: Most states in 2025 are offering road tax exemptions for almost all electric categories, including:
- Electric motorcycles and scooters: Ola S1 Pro, TVS iQube, Ather 450X, Hero Vida.
- Electric cars: Tata Nexon EV, MG Comet, Mahindra XUV400, BYD e6, Hyundai Kona, MG ZS EV.
- Electric rickshaws and three-wheelers: Mahindra Treo, Piaggio Ape E-City.
- Electric commercial vehicles: E-trucks, e-buses.
- Electric taxis: Fleet operators like BluSmart, Uber EV.
Important:
- Exemptions apply only at the time of new registration.
- Retrofit/conversion EVs may not be eligible in all states.
- You need valid proof of electric powertrain and battery details.
Vehicle Types and Eligibility List
- Private two-wheelers and cars: Usually 100% exempt.
- Electric taxis and shared mobility vehicles: 100% or partial exemptions.
- Good carrier EVs: Covered in leading EV states.
- Buses and e-rickshaws: Most states provide benefits on these too.
Expert Insight
Mahindra Treo e-rickshaw owners in Odisha reported road tax savings of up to ₹11,000 per new registration in 2024-2025. This is a significant cost relief for commercial drivers.
How Can You Claim Road Tax Exemption for Your New EV in India?
Claiming your road tax exemption is straightforward if you know the process:
- Check if your state offers 100% or partial road tax exemption at the time of EV registration.
- At the dealer, inform that you are opting for EV and want to claim all current government benefits.
- Most authorized dealers manage the paperwork with the RTO, ensuring you are billed zero or discounted road tax.
- Bring a valid ID, address proof, and Aadhar/PAN for RTO records. Your invoice must specify the vehicle as a pure battery EV.
- For commercial vehicles, provide company’s GST registration, trade license, and commercial insurance proof.
Step-by-step:
- Get proforma invoice from dealer with ex-showroom price only (excluding road tax).
- Fill registration form and submit required documents.
- Dealer/RTO submits your exemption request.
- Receive your RC (Registration Certificate) with exemption stamped.
Did You Know?
You can check your EV’s eligibility for road tax exemption on the Vahan Portal (https://vahan.parivahan.gov.in/) by entering your state and vehicle details!
What Documents and Proof Are Needed for EV Road Tax Exemption?
When claiming exemption at your RTO, you’ll need certain paperwork. Delay in proper documents often leads to request rejection.
For private individuals:
- Aadhar card/PAN card (ID proof).
- Proof of address (ration card, utility bill, rental agreement).
- Invoice clearly stating “Battery Electric Vehicle” or “BEV.”
- Vehicle Insurance (with ’electric vehicle’ tag).
- Form 20 (application for registration).
- Form 21 (sale certificate from dealer).
For company/fleet vehicles:
- Company registration proof/GST certificate.
- Board resolution/authorization letter to register vehicle.
- Dealer invoice in company’s name.
- Additional commercial permits as needed.
Checklist:
- Double-check current RTO rules, as some states may ask for additional battery details or faster invoice verification.
- Always verify that the dealer is RTO-registered for exemptions.
- Keep a scanned copy of all documents for future reference.
Will Road Tax Exemptions for EVs Continue After 2025?
One frequent concern is whether these lucrative exemptions will continue beyond 2025. Here’s what you need to know:
- Most leading EV states (Delhi, Maharashtra, Tamil Nadu, Karnataka) have EV policies that renew every 2-3 years.
- As of early 2025, road tax exemptions are extended at least till December 2025 in these states.
- The central government is encouraging states to continue these benefits at least till India achieves its 2030 target.
- However, future extension depends on annual state budget, number of EVs already registered, and environmental goals met.
- Policy updates can happen in March (budget season) or new fiscal year, so monitor state transport sites and news.
What this means for you:
- If you plan to buy an EV, do so before the announced exemption period ends to maximize your savings.
- Exemptions can reduce or end if your state reaches its target number of EVs sooner, so don’t delay your decision.
Expert Insight
Most auto industry analysts predict that major Indian states will continue full or partial road tax exemptions until at least 2027–2028, considering aggressive green targets.
What Other State and Central Incentives Can EV Users Avail in 2025?
Road tax exemption is just the start. In 2025, you are also eligible for:
- FAME-II subsidy (central government): Up to ₹1.5 lakh for cars, ₹30,000 for two-wheelers, depending on model and battery capacity.
- State purchase subsidies: Extra benefit in Kerala, Gujarat, Maharashtra (even after FAME-II expiry in some cases).
- Exemption from registration charges (₹2,000-5,000).
- Waiver of permit requirements for certain EV’s (e-auto/e-rickshaw in some states).
- Lower or zero parking fees and toll discounts (pilot programs in Maharashtra, Delhi).
For a typical EV buyer, this means combined savings of ₹1 lakh to ₹2.5 lakh or more in upfront cost.
Table: Additional Incentives for EVs (2025, Select States)
| State | State Subsidy (₹) | Registration Fee Waiver | Permit Exemption | Other Perks |
|---|---|---|---|---|
| Delhi | 1,50,000 (car) | Yes | Auto, taxi | Free parking |
| Maharashtra | 1,00,000 (car) | Yes | Yes | Discounted tolls |
| Tamil Nadu | 1,20,000 (car) | Yes | Yes | No permit fee |
| Gujarat | 1,00,000 (car) | Yes | Yes | |
| Karnataka | 0 (FAME-II only) | Yes | Yes | |
| Telangana | 1,20,000 | Yes | Yes | |
| Kerala | Up to 1,50,000 | Yes | Yes |
You should check your state’s EV policy page to get the latest on these perks.
Did You Know?
Zero registration and permit fees mean a typical e-rickshaw driver in Delhi can save up to ₹18,000 per new vehicle, as per 2024-2025 trends.
Who Has Benefited Most from Road Tax Exemptions? Real User Stories from India
Hearing from real users helps make this decision relatable. Here are firsthand experiences from across India:
- Smita (Delhi): Bought a Tata Nexon EV in September 2024. She skipped nearly ₹1.4 lakh in road tax, plus got ₹1.5 lakh post-purchase state subsidy. Says, “This made the Tata Nexon EV’s on-road price almost the same as the petrol version. It convinced me to switch.”
- Mohan (Bengaluru): Shifted his taxi business to all-electric with Mahindra e-Verito. “No road tax and very low maintenance means my running costs are lower than ever before.”
- Ayesha (Kerala): Purchased an Ola S1 Pro with 50% road tax exemption. “Though not zero, it still saved me over ₹8,000 compared to buying outside Kerala.”
- Rajesh (Mumbai): Runs a commercial fleet. Managed to convert 15 out of 20 taxis to EVs using 100% tax exemption and bulk state subsidy. “The financial upside has been huge, especially with permit and parking incentives.”
These stories echo a common theme — road tax savings make EVs much more affordable, altering buying decisions in favor of electric vehicles.
Did You Know?
As per a 2025 survey by CEEW, over 63% of first-time EV buyers in India say tax and fee savings were a decisive factor in their purchase.
What Should You Watch Out for When Applying for Road Tax Exemption on EVs in India?
While most of the process is smooth, Indian users do face a few practical challenges:
- Not all RTOs are equally prompt; some may delay or need additional clarification, especially in smaller towns.
- The exemption is meant for new registrations only, not for used imported EVs or retrofitted vehicles in most states.
- State policies can change with little notice, or get temporarily paused at financial year-end (March).
- Some OEMs or dealers may not pass on full benefit, so always double-check invoice breakdown.
- Check whether your EV has AIS 140 (Automotive Industry Standard) compliance for commercial use.
Checklist Before You Decide:
- Confirm exemption and subsidy status with both dealer and state RTO before making any payment.
- Print/email all communication as backup if disputes arise later.
- Make your purchase decision before state’s policy expiration or quota/cap runs out.
Expert Insight
If you see “Road Tax - ₹0” on your vehicle invoice, cross-verify with your RTO on the Vahan site. Sometimes, fees are included by error or for local charges like Smart Card/number plate not covered by exemption.
Final Verdict: Should You Buy an EV in India to Avail Road Tax Exemptions in 2025?
Looking at the facts, user stories, and potential savings, if you’re considering a car, two-wheeler, or commercial vehicle in India in 2025, going electric provides strong financial and environmental upsides — mainly because of substantial road tax exemptions.
- Full or partial road tax waiver can make your EV’s on-road cost nearly equal to or cheaper than the petrol/diesel alternative in state capitals like Delhi, Mumbai, Bengaluru, and Chennai.
- The process is easier than most think — just be sure your documents are in order, and your dealership is proactive with paperwork.
- With additional perks and the biggest chunk of upfront savings available only till 2025 (in most states), delaying your EV purchase could mean missing these benefits.
In 2025, this is a solid window to make your move to electric, keep your upfront cost low, and contribute to a greener India.
Did You Know?
Switching to an EV with road tax exemption can result in five-year total savings of ₹2–4 lakh, considering fuel, maintenance, and government incentives!
Conclusion
India’s 2025 EV policies have made road tax exemption a powerful incentive for new buyers. With most leading states offering 100% or significant partial waivers, your decision to go electric is now more financially attractive than ever.
By making a timely, well-informed purchase and checking your home state’s latest guidelines, you could save lakhs upfront — shattering the myth that EVs are always costlier.
If you plan to buy a car, two-wheeler, or commercial vehicle, act soon to lock in these government-backed benefits before policy changes. For more info, always check your state’s transport or EV policy portal, speak with your local RTO and select a reputable dealer.
To sum up: 2025 is an excellent year to make your move to electric mobility in India — for your wallet and for the planet.
Additional FAQs
1. Is there a central government road tax exemption for EVs in India?
No, road tax exemptions are decided by individual states, not by the central government. However, central subsidies under FAME-II, registration fee waivers, and GST benefits still apply.
2. Will I get a refund if I already paid road tax but want to switch my ICE vehicle to an EV?
Generally, road tax is not refundable. Exemptions only apply to new registrations of electric vehicles, not retrofits or conversions.
3. Do EV road tax exemptions apply to used or imported electric vehicles in India?
No, exemptions are available only on new EVs registered for the first time. Used/imported EVs do not qualify in most Indian states.
4. Can I transfer my EV to another state and still keep road tax exemption?
When transferring to another state, you may have to pay road tax as per the new state’s rules, even if your original state provided a waiver.
5. What happens if the EV policy changes after my purchase — will it impact my tax exemption?
Once your vehicle is registered and your tax exemption is granted, policy changes do not retrospectively affect your existing benefit.
Disclaimer: State EV policies are subject to change. For the most accurate and up-to-date information on road tax exemptions in 2025, please check with your local RTO or the official state transport website before purchase.