Buying a Vehicle in Punjab Just Got Costlier: Government Hikes Taxes on Cars and Bikes

Punjab’s New Tax Rates for Vehicles: What You Need to Know

The Punjab government, led by Chief Minister Bhagwant Mann, has recently increased the taxes on cars and two-wheelers. This decision comes at a time when inflation is already putting pressure on people’s wallets. With the new tax hike, the cost of purchasing vehicles in the state will rise, adding burden on buyers.

New Tax Rates for Cars

As per the new rates set by the Punjab Transport Department, the motor vehicle tax will now be calculated based on the actual price of the vehicle. Here’s a breakdown of how the new tax rates will affect car buyers:

1. Cars up to ₹15 Lakh:
   • The tax rate has been increased from 9% to 9.5%.
   • This means that for a car costing ₹15 lakh, the tax amount will increase by ₹7,500.
2. Cars Between ₹15 Lakh and ₹25 Lakh:
   • The tax rate has been hiked from 11% to 12%.
   • For a car priced at ₹25 lakh, this means an additional ₹25,000 in taxes.
3. Cars Above ₹25 Lakh:
   • A new category has been introduced for cars costing more than ₹25 lakh.
   • The tax rate for this category is now 13%, further increasing the cost of premium vehicles.

New Tax Rates for Two-Wheelers

The tax rates for two-wheelers have also been revised, with the new rates depending on the cost of the bike or scooter:

1. Two-Wheelers up to ₹1 Lakh:
   • The tax rate has been increased from 7% to 7.5%.
   • This means an additional 0.5% tax on the price of the two-wheeler.
2. Two-Wheelers Between ₹1 Lakh and ₹2 Lakh:
   • The tax rate has been set at 10%.
   • This will increase the cost of mid-range bikes and scooters.
3. Two-Wheelers Above ₹2 Lakh:
   • The tax rate for high-end two-wheelers is now 11%.
   • This makes owning a premium bike or scooter more expensive.

Why the Government Imposes Vehicle Taxes

When buying a new vehicle, it’s important to remember that the price you pay includes several taxes, not just the base price of the vehicle. The government imposes these taxes for various reasons:

1. Infrastructure Development:
   • The revenue from vehicle taxes is used to build and maintain infrastructure like roads, bridges, and public facilities.
   • This helps improve the overall quality of life by providing better transportation and public amenities.
2. Pollution Control:
   • Higher taxes on vehicles, especially those that are less fuel-efficient or produce higher emissions, are a way for the government to discourage the use of polluting vehicles.
   • This initiative is part of broader efforts to reduce air pollution and promote environmental sustainability.
3. Road Safety:
   • The taxes also fund initiatives aimed at improving road safety, such as better signage, traffic management, and accident prevention measures.
   • This contributes to making the roads safer for everyone.

Impact on Vehicle Buyers

The recent tax hike by the Punjab government is likely to make both cars and two-wheelers more expensive across the state. Buyers will need to factor in these increased costs when planning to purchase a new vehicle. The additional taxes could particularly affect those looking to buy mid-range to premium vehicles, as the tax burden is proportionately higher on more expensive models.

In summary, while the government aims to use the tax revenue for public benefit, the immediate impact on consumers will be an increase in the overall cost of owning a vehicle in Punjab. Prospective buyers should be aware of these changes and plan their purchases accordingly.