Tax hike in Punjab drives up costs for cars and two-wheelers

Buying cars and two-wheelers in Punjab will now be more expensive as the state government has raised motor vehicle taxes by 0.5% to 1%. The decision, aimed at addressing financial constraints, was announced on Thursday by the transport department, and the new rates will be applied to the actual price of vehicles, excluding taxes.

New tax rates for different vehicle categories

For cars costing up to ₹15 lakh, the tax rate has increased from 9% to 9.5%, leading to a price hike of up to ₹7,500. Vehicles priced between ₹15 lakh and ₹25 lakh will now be taxed at 12%, resulting in an additional cost of nearly ₹25,000. For the first time, cars priced above ₹25 lakh will face a 13% tax rate.

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Impact on two-wheeler prices

The tax on two-wheelers costing up to ₹1 lakh has been increased to 7.5%, with a maximum additional cost of ₹7,500. For those priced between ₹1 lakh and ₹2 lakh, the tax rate is now 10%, causing a price rise of up to ₹20,000. For two-wheelers above ₹2 lakh, the new tax rate is 11%, leading to a minimum price hike of ₹22,000. 

The tax hike comes just before the festive season, making vehicles more expensive for consumers in the state.