Synopsis
Karnataka has withdrawn lifetime road tax exemptions for electric cars, jeeps, buses, and private vehicles, except for two-wheelers. The move aims to generate an additional Rs 250 crore in revenue, with tax rates varying based on vehicle price. This decision has drawn criticism as a regressive step against EV adoption.The Karnataka government has withdrawn the exemption from lifetime road tax for a range of electric vehicles (EVs) including cars, jeeps, buses and other private vehicles. The exemption, however, will continue for electric two wheelers.
The cash-strapped government has brought all EVs or battery-operated vehicles under the purview of this tax, which was earlier applicable only for vehicles priced at or above Rs 25 lakh.
However, the tax rate will depend on the price of the vehicle. The buyer needs to pay 5% of the cost of the vehicle as tax if it is priced under Rs 10 lakh, 8% if priced between Rs 10-25 lakh, and 10% if it is higher than Rs 25 lakh.
For vehicles that are already registered, the owner has to pay between 93% and 25% of the lifetime tax, with the percentage of the levy tapering with age.
Additional revenues
The government has levied this tax on EVs by passing the Karnataka Motor Vehicles Taxation (Amendment) Bill, 2026, in March. The regional transport offices (RTOs) will start collecting the taxes after the government notifies them
Officials said this is purely a measure aimed at generating additional revenues and the government hopes to net an additional Rs 250 crore from this.
The government has sought to levy this tax at a time when many are showing an interest in switching to EVs to deal with the uncertainties caused by war in the Persian Gulf.
“At a time when policy should be accelerating the transition away from fossil fuels and advancing climate goals, the Karnataka Congress government has chosen to levy lifetime taxes on electric vehicles — a regressive and counterproductive move,” Mysuru-Kodagu MP Yaduveer Wadiyar (BJP) said on a post on X.
The four state-run transport utilities are struggling with delays in the release of subsidies under the government’s Shakti scheme, which offers free rides for women in non-AC buses. The government has budgeted over Rs 5,300 crore for this in FY27.
