Kozhikode: The revised motor vehicle tax rates announced in Kerala’s state budget on February 7 will take effect from April 1, impacting both old vehicles and electric vehicles (EVs). The changes introduce higher tax slabs for vehicles older than 15 years and a new tiered tax structure for EVs, raising concerns among vehicle owners.
Higher Tax for Old Vehicles
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Motorcycles and private-use three-wheelers older than 15 years will now pay ₹400 more in tax for five years.
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Car owners will face increased tax rates based on vehicle weight:
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₹3,200 hike for cars up to 750 kg.
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₹4,300 increase for vehicles between 750 kg and 1,500 kg.
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₹5,300 rise for cars above 1,500 kg.
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The previous classification of contract carriage vehicles into ordinary, pushback, and sleeper classes has been removed, simplifying the tax system.
Changes in Electric Vehicle Taxation
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Previously, all EVs were taxed at 5% of their price.
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Under the new rules:
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EVs priced up to ₹15 lakh will continue to be taxed at 5%.
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EVs between ₹15 lakh and ₹20 lakh will now be taxed at 8%.
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EVs above ₹20 lakh will face a 10% tax.
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The tax for electric two-wheelers and three-wheelers remains unchanged at 5%.
Implementation and Compliance
The Motor Vehicles Department has confirmed that the revised tax rates will be implemented starting April 1. Authorities have instructed that any pending tax payments from the previous financial year (April 1, 2023 – March 31, 2024) must be recalculated based on the new rates and collected accordingly, without waiting for an audit.
While the changes aim to boost revenue and streamline taxation, the increased rates—especially for EVs—have sparked concerns among vehicle owners and prospective buyers.
