Buying A New Vehicle In Maharashtra Becomes More Expensive Following Amendment To Motor Vehicle Tax Act; Check Details

Mumbai: Buying a new vehicle in Maharashtra has become more expensive following recent changes to the Maharashtra Motor Vehicle Tax Act, 1958. The revised tax structure, introduced through the Maharashtra Motor Vehicle Tax (Amendment) Act, 2025, came into effect across the state on July 1, 2025.

This amendment is expected to impact new vehicle buyers, especially those purchasing luxury and commercial vehicles. These changes will have a greater effect on the purchase of high-end cars, CNG/LNG vehicles, and goods carriers due to a significant increase in one-time tax rates. Additionally, the new rules have raised the price bracket cap used for tax calculations from Rs 20 lakh to Rs 30 lakh, resulting in a sharp rise in taxes for vehicles priced above Rs 20 lakh.

Details On Updated Price Structure

Under the updated structure, petrol cars registered in an individual’s name will now attract one-time taxes of 11% for vehicles priced below Rs 10 lakh, 12% for those between Rs 10 lakh and Rs20 lakh, and 13% for vehicles costing above Rs 20 lakh. Diesel cars, meanwhile, will see tax rates of 13%, 14%, and 15%, respectively, across the same price brackets.

Significantly, the one-time tax cap has increased from ₹20 lakh to Rs 30 lakh, meaning luxury vehicles priced beyond Rs 20 lakh will become costlier by at least Rs 10 lakh. For example, diesel and petrol high-end cars priced over Rs1.30 crore and Rs 1.50 crore, respectively, will now incur a one-time tax of around Rs 20 lakh.

Vehicles imported or registered under company names will face a flat one-time tax of 20%, irrespective of price, for both petrol and diesel vehicles.

CNG and LNG vehicles will also experience a modest increase, with a 1% hike in one-time tax across all price brackets.

Goods carriers, including pickup trucks and tempos with a gross vehicle weight of up to 7,500 kg, along with construction vehicles like cranes, compressors, and projectors, will now be taxed based on their price instead of weight. The tax rate for these vehicles has been raised from 7% to 10%. For example, a pickup truck costing ₹10 lakh, which earlier attracted Rs 20,000 tax based on weight, will now incur a tax of approximately Rs 70,000 under the new structure.

However, electric vehicles (EVs) continue to enjoy tax exemptions, despite initial proposals to levy a 6% tax on EVs priced above Rs 30 lakh, which were later withdrawn.

The Transport Commissioner of Maharashtra issued a notification on June 25, 2025, confirming the implementation of the amended Act from July 1, except for Section 5(2), which remains excluded for now.

Key Changes in the Motor Vehicle Tax Act

Vehicle price bracket cap increased from Rs20 lakh to Rs30 lakh for tax calculations.

One-time tax rates for petrol and diesel vehicles increased across all price brackets.

New category introduced for construction vehicles and light goods vehicles under 7,500 kg.

Goods carriers now taxed based on price instead of weight, with rates increased from 7% to 10%.

EVs remain exempt from tax despite previous proposals.

Published on: Tuesday, July 01, 2025, 09:37 AM IST