This State Makes Owning a Luxury Car Cheaper Than Ever: Find Out Why!

Are you planning to buy a luxury car and do not want to pay a huge amount of road tax? Well, in that case, you should register your car in the state of Puducherry. Yes, you read that right. If you want to save lakhs of rupees, then consider registration of your new luxury vehicle in this Union Territory. Unlike other high-tax states like Karnataka and others, where luxury cars above Rs 20 lakh get taxed at 15–18 percent, in Puducherry, you only have to pay a one-time road tax of Rs 1.25 lakh. However, registering in Puducherry comes with its own set of issues in many parts of the country. We’ll get to that in just a bit.

Register luxury car in Puducherry and save lakhs

Puducherry, being a Union Territory, has a different structure for taxes. It is a public-centric state that does not rely on road taxes. For this reason, the road taxes in the state are very low. If the car is priced under Rs 5 lakh, the road tax is just Rs 5,000. For Rs 5–8 lakh cars, it is Rs 11,000, and for cars priced in the range of Rs 8–15 lakh, it is Rs 60,000.

Once the price goes above Rs 15 lakh but stays under Rs 20 lakh, the state requires a tax of Rs 1.1 lakh. Finally, if the price of the vehicle exceeds Rs 30 lakh, the state only charges Rs 1.25 lakh, and this is the final lifetime road tax amount. So even if the vehicle that you are planning to buy is priced in crores, you’ll have to pay just Rs 1.25 lakh.

Why is registration and road tax so low in Puducherry?

Now, like any other rational person with curiosity, you’ll be asking this question as to why Puducherry has such low road taxes when other states have a lot more of them. Well, the answer to this is that there are many reasons. First off, it is related to governance.

Unlike other states that rely on road taxes along with other taxes, Union Territories like Puducherry receive a significant amount of financial assistance from the central government. For this reason, they can maintain lower tax rates. Also, the smaller geographical area of Puducherry helps the government to maintain roads and other infrastructure with relatively less expenditure.

Also, these lower tax rates help the Puducherry administration to attract more vehicle registrations from people who do not reside in the state and drive their vehicles in other cities. The lower tax rates help in boosting revenues and also encourage the growth of car dealerships, service centres, and insurance agencies.

How can you register your luxury car in Puducherry?

After reading about the road taxes in Puducherry, you may be wondering how you can register your luxury car in this state. The answer to this is that you’ll have to follow these steps.

• First of all, you’ll have to obtain proof of address in the state of Puducherry. You’ll require documents like rental agreements, electricity bills, and affidavits.
• Following this, you’ll take your proof of residence and then submit them to the Regional Transport Office of Puducherry.
• Then you’ll have to pay the road tax for your vehicle, which will depend upon the price of the car chosen by you.
• Finally, after completing the verification, you’ll receive the Puducherry registration number for your luxury vehicle.

Be careful

We have to mention that although it seems very straightforward, you still have to be careful. We say this because, in the last few years, many people have started using the above method to register their cars in this state. So, for this reason, the RTO has become strict and is clamping down on people who are using this method of saving road tax by registering in a state they do not live in.

This is because it’s illegal in many India states to drive cars registered from other states without paying the road tax. For instance, in Karnataka, you can drive an out-of-state car for only the first 11 months without paying road tax. If you want to drive the out-of-state car beyond 11 months in Karnataka, you need to pay Karnataka road tax.

Other states have similar rules too but most states don’t crack down on ‘out-of-state’ cars as aggressively as RTO officials in say Karnataka and Kerala.

High road tax states and other low road tax states

When it comes to road taxes, Karnataka has the highest road taxes in India. Vehicles up to Rs 4 lakh are subjected to 13 percent, Rs 5–10 lakh – 14 percent, Rs 10–20 lakh – 17 percent, and above Rs 20 lakh – 18 percent. As for Andhra Pradesh and Telangana, vehicles priced below Rs 10 lakh are taxed at 12 percent, and those above Rs 10 lakh are taxed at 14 percent. Maharashtra has taxes upwards of 15 percent.

As for other lower-tax states, in Delhi, cars up to Rs 6 lakh are taxed at 4 percent for petrol and 5 percent for diesel. Meanwhile, Rs 6–10 lakh cars: petrol – 7 percent and diesel – 8.75 percent. Lastly, for cars above Rs 10 lakh: petrol – 10 percent and diesel – 12.5 percent.

Another state with lower road taxes is Assam. Cars that are priced up to Rs 4 lakh are taxed at 5 percent, and those which are in the range of Rs 15–20 lakh are taxed at 9 percent. Finally, those above Rs 20 lakh are taxed at 12 percent.

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