In a move to rationalize and streamline motor vehicle taxation, the Government of Karnataka has officially notified the Karnataka Motor Vehicles Taxation (Amendment) Act, 2025. Published in the Karnataka Gazette Extraordinary on April 4, 2025, and assented to by the Governor on April 3, 2025, the amendment brings significant changes to the 1957 Taxation Act.
The amendment, primarily address the removal of luxury tax references, updates to lifetime tax slabs, and refund provisions for certain classes of vehicles.
🔧 Key Amendments at a Glance
1. Removal of “₹10 Lakh+ Cost” Clause
- In Sections 3(1)(d) and 4(1) of the principal Act, the phrase “the cost of which exceeds ₹10 Lakhs” has been omitted, potentially reducing the tax burden for high-cost vehicles.
2. Revised Lifetime Tax for Construction Equipment Vehicles
Applicable to vehicles under Rule 2(cab) of the Central Motor Vehicle Rules, 1989, including air compressor and generator-fitted vehicles.
📊 PART A7 – Lifetime Tax Table
| Vehicle Age from Registration | Tax as % of New Vehicle Tax (8% of Cost) |
| New Vehicle (At Registration) | 8% of the cost of vehicle |
| Not more than 2 years | 93% |
| 2–3 years | 87% |
| 3–4 years | 81% |
| 4–5 years | 75% |
| 5–6 years | 69% |
| 6–7 years | 64% |
| 7–8 years | 59% |
| 8–9 years | 54% |
| 9–10 years | 49% |
| 10–11 years | 45% |
| 11–12 years | 41% |
| 12–13 years | 37% |
| 13–14 years | 33% |
| 14–15 years | 29% |
| More than 15 years | 25% |
3. Updated Tax for Motor Cabs (Within Karnataka)
Covers motor cabs excluding those registered outside Karnataka but operating under permits from Section 88(9) of the Motor Vehicles Act, 1988.
📊 PART A8 – Lifetime Tax for Motor Cabs
At Registration:
| Vehicle Type | Lifetime Tax (% of Vehicle Cost) |
| Cost ≤ ₹10 Lakhs | 10% |
| Cost > ₹10 Lakhs but ≤ ₹15 Lakhs | 9% |
| Cost > ₹15 Lakhs | 15% |
| Electric Motor Cabs costing > ₹25 Lakhs | 10% |
For Registered Vehicles (Tax % of Above Slabs):
| Vehicle Age | % of Original Tax |
| ≤ 2 years | 93% |
| 2–3 years | 87% |
| 3–4 years | 81% |
| 4–5 years | 75% |
| 5–6 years | 69% |
| 6–7 years | 64% |
| 7–8 years | 59% |
| 8–9 years | 54% |
| 9–10 years | 49% |
| 10–11 years | 45% |
| 11–12 years | 41% |
| 12–13 years | 37% |
| 13–14 years | 33% |
| 14–15 years | 29% |
| >15 years | 25% |
4. Refund Provisions for Motor Cabs
Refunds will now be provided if a motor cab is removed from registration or scrapped within 15 years. The refund is based on the vehicle’s age at the time of deregistration.
📊 PART C7 – Refund Table
| Vehicle Deregistration Time | Refund (% of Life Time Tax Paid) |
| Within 1 year | 93% |
| 1–2 years | 87% |
| 2–3 years | 81% |
| 3–4 years | 75% |
| 4–5 years | 69% |
| 5–6 years | 64% |
| 6–7 years | 59% |
| 7–8 years | 54% |
| 8–9 years | 49% |
| 9–10 years | 45% |
| 10–11 years | 41% |
| 11–12 years | 37% |
| 12–13 years | 33% |
| 13–14 years | 29% |
| 14–15 years | 25% |
| After 15 years | No Refund |
📝 Final Word
The Karnataka Motor Vehicles Taxation (Amendment) Act, 2025 marks a progressive shift towards simplified, performance-linked, and age-based taxation for commercial and construction vehicles. It is expected to:
- Encourage fleet modernization
- Support the electric vehicle segment
- Streamline tax collection and refunds
