Trust = LIC OF INDIA

Trust = LIC OF INDIA

ஞாயிறு, 30 மார்ச், 2025

🏎️ From Bengaluru to Pondy: The road tax hack that blew up

The gearshift : Taxes

Puducherry had the lowest taxes in the country. This put luxury car owners on the fast lane to the union territory when they had to register their vehicles. For  a ₹1 crore luxury vehicle, the difference could zoom away to ₹10–15 lakhs. 

And that’s what took the rich and the famous on a detour to “register” their cars in Puducherry, even if they had never set foot there. 

Let us understand this with an example.

And this is a conservative estimate. In many cases, insurance premiums and handling charges shift into a higher gear in high-tax states. Some high-end trims can even race past the ₹1.2 crore mark after tax, which is why people looked for a shortcut and tried to “export their registration” to Puducherry.

Road Taxes in Puducherry vs Bangalore (Karnataka) 

Amala Paul and MS Dhoni Hit a Speed Bump

But… Is This Legal?

Short answer: No.

Under the Motor Vehicles Act, you must register your vehicle in the state where you reside. If you move, you can transfer your registration, but not just to save money.

What the Kerala and Tamil Nadu transport departments uncovered was a web of fake lease agreements, ghost addresses, and agents helping buyers dodge local taxes.

The court also said that paying tax in one state doesn’t give you a free pass, you may need to re-register and pay the difference if you move.

Cutlet Byte: What is Road Tax, and Why Does It Vary So Much?

Image

Road tax is a one-time state-level tax on private vehicles, paid at the time of registration.

Image

It’s calculated as a percentage of the vehicle’s cost.

Image

States have the freedom to set their own rates, hence the wide disparity.

Alternatively, you can also apply for the Bharat Number Plates. The BH number plate system aims to simplify interstate vehicle transfers. Previously, when individuals moved to a new state, they had to go through the lengthy process of re-registering their vehicles, which was often costly. The BH series makes this unnecessary, allowing vehicles to keep their registration no matter where the owner moves in India.

If You’re Actually Moving States...

Here’s what you legally need to do:

Image

Get a No Objection Certificate (NOC) from your original RTO

Image

Apply for re-registration in the new state

Image

Pay the difference in road tax

Image

Claim a refund from the original state (yes, that’s allowed!)


The gearshift : Taxes

The gearshift : Taxes

Puducherry had the lowest taxes in the country. This put luxury car owners on the fast lane to the union territory when they had to register their vehicles. For  a ₹1 crore luxury vehicle, the difference could zoom away to ₹10–15 lakhs. 

And that’s what took the rich and the famous on a detour to “register” their cars in Puducherry, even if they had never set foot there. 

Let us understand this with an example.

And this is a conservative estimate. In many cases, insurance premiums and handling charges shift into a higher gear in high-tax states. Some high-end trims can even race past the ₹1.2 crore mark after tax, which is why people looked for a shortcut and tried to “export their registration” to Puducherry.

Road Taxes in Puducherry vs Bangalore (Karnataka) 

Amala Paul and MS Dhoni Hit a Speed Bump

But… Is This Legal?

Short answer: No.

Under the Motor Vehicles Act, you must register your vehicle in the state where you reside. If you move, you can transfer your registration, but not just to save money.

What the Kerala and Tamil Nadu transport departments uncovered was a web of fake lease agreements, ghost addresses, and agents helping buyers dodge local taxes.

The court also said that paying tax in one state doesn’t give you a free pass, you may need to re-register and pay the difference if you move.

Cutlet Byte: What is Road Tax, and Why Does It Vary So Much?

Road tax is a one-time state-level tax on private vehicles, paid at the time of registration.

It’s calculated as a percentage of the vehicle’s cost.

States have the freedom to set their own rates, hence the wide disparity.

Alternatively, you can also apply for the Bharat Number Plates. The BH number plate system aims to simplify interstate vehicle transfers. Previously, when individuals moved to a new state, they had to go through the lengthy process of re-registering their vehicles, which was often costly. The BH series makes this unnecessary, allowing vehicles to keep their registration no matter where the owner moves in India.

If You’re Actually Moving States...

Here’s what you legally need to do:

Get a No Objection Certificate (NOC) from your original RTO

Apply for re-registration in the new state

Pay the difference in road tax

Claim a refund from the original state (yes, that’s allowed!)