The Uttar Pradesh state government has revised the one-time tax on the purchase of private vehicles, increasing it by one percentage point. As per the new rates, vehicles priced below ₹10 lakh will now be taxed at 9%, up from the previous 8%. For vehicles priced above ₹10 lakh, the tax has risen from 10% to 11%. The tax rate for two-wheelers costing less than ₹40,000 remains unchanged at 7%.
The decision was taken during a cabinet meeting held on Tuesday at Lok Bhawan, chaired by Chief Minister Yogi Adityanath. Of the 15 proposals presented, 13 received approval. The two proposals from the Housing Department were sent back for further review. This move is part of a broader amendment to the transportation department’s tax structure to boost state revenue.
The cabinet approved a proposal to amend the motor vehicle taxes under the Uttar Pradesh Motor Vehicle Taxation Act of 1997. Under Section 4 of the Act, the one-time tax on non-commercial (private) vehicles has been revised. This is the first tax revision of its kind since 2015.
The revised tax is expected to generate more than ₹413 crore in additional revenue for the transport department annually. Currently, the government faces an annual revenue shortfall of nearly ₹1,000 crore due to exemptions granted for electric vehicles on road tax and registration fees. This latest increase is seen as a step toward addressing that shortfall.
Transport Minister Dayashankar Singh explained that although the tax rate has been increased, it remains lower than the rates in several other states, including Karnataka, Maharashtra, and Rajasthan.
“This is the first adjustment since 2015. Given the growing revenue gap caused by EV-related exemptions, the department has taken a necessary step. Even with the increase, our rates remain competitive compared to other major states,” Singh stated.
