Tamil Nadu government has decided to increase tax rates, which is expected to have a significant impact on the prices of cars and bikes in the state. The move has sparked concerns among both consumers and the automobile industry.
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The tax hike primarily targets road taxes for certain types of vehicles, affecting share autos, taxis, and trucks, which will now pay higher road tax amounts. This increase in road taxes is likely to have a cascading effect on freight and commute costs, potentially burdening consumers and businesses.
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One of the notable changes introduced by the government is in the TN Motor Vehicles Taxation Act, 1974. For two-wheelers costing more than one lakh rupees, the lifetime tax rate has been raised from 8% to 12%. This means that if someone previously paid Rs 9,600 in taxes for a two-wheeler, they will now have to pay Rs 14,400. Similarly, cars in the price range of 5 lakhs to 10 lakhs will be subject to an 18% tax, and those costing more than 20 lakhs will be taxed at 20%.
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Moreover, when purchasing a new vehicle from showrooms, buyers will also have to cover additional expenses like registration charges, green taxes, insurance premiums, handling charges, and more.Ā