The Karnataka government has enacted the Karnataka Motor Vehicles Taxation (Amendment) Act, 2026, which introduces a lifetime road tax for electric vehicles (EVs). Previously, these vehicles were exempt from such taxes.
This amendment applies to various types of EVs, including cars, jeeps, and buses, while two-wheelers will still benefit from tax exemptions.
Tax Structure:
- Vehicles priced under ₹10 Lakh: 5% tax
- Vehicles priced between ₹10-25 Lakh: 8% tax
- Vehicles priced above ₹25 Lakh: 10% tax
Previously, all EVs enjoyed a complete exemption from road tax in Karnataka. For pre-registered vehicles, the tax will decrease based on the vehicle's age, ranging from 93% to 25% of the total lifetime tax.
This change is projected to generate approximately ₹250 Crore in additional revenue for the state government.
In light of this amendment, several electric vehicle manufacturers had previously reached out to Karnataka's Chief Minister Siddaramaiah, requesting relief from the new tax structure, citing concerns that it could hinder the growth of EV adoption in the state.
The tax exemptions were initially introduced in 2016 to encourage the adoption of electric vehicles. Recent trends indicate a surge in EV registrations across India, particularly due to rising fuel prices and the ongoing geopolitical tensions in West Asia.
In March alone, EV registrations in the country saw a remarkable increase of 46% month-on-month, totaling nearly 2.8 Lakh units.
