Telangana Hikes Life Tax on Personal Vehicles Starting August 14

speedy Summary

• Telangana Transport Department has increased the life tax on non-transport vehicles effective August 14, 2025.
• Previous tax rates:

– Four-wheelers: 12%-14% depending on cost.
– Two-wheelers: 9%.
– Non-transport three-wheelers: 12%.

• Revised tax rates:

– Two-wheelers: Tax now ranges from 9%-18% based on vehicle price.
– Three-wheelers, four-wheelers, and non-transport vehicles with up to 10 seats: Tax ranges from 13%-21%, based on price. Vehicles costing above ₹50 lakh attract a maximum rate of 21%.
– Company-owned vehicles: Life tax now varies between 15%-25%, depending on cost.- Additional surcharge of 2% applies to second or more vehicles by an owner.

• government rationale behind the hike includes funding improvements for “road infrastructure, road safety, and better enforcement.”

photo Credit: Graphics by SUBYENDU GANGULY

Indian Opinion Analysis

The increased life tax in Telangana reflects the state’s intent to enhance road development and safety measures while accommodating rising expenses associated with infrastructure betterment. Escalating costs for high-end vehicles (above ₹50 lakh) and company-owned fleets signal an attempt to target revenue generation from those capable of absorbing higher taxes without affecting entry-level riders significantly. The added surcharge for second or subsequent owned vehicles might curb excessive accumulation of personal transportation assets.This policy could have mixed impacts-potentially dissuading some buyers in higher brackets while modestly affecting demand in lower-cost segments due to retained minimal rates (e.g., starting at just a 9%). Ensuring clarity about how funds collected under these enhanced taxes are utilized will be crucial for maintaining public trust.

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