Despite strong opposition, the transport department will proceed with the collection of lifetime tax on all variants of electric cars. Officials said technical changes are being made to the Vahan portal to enable tax collection, and the rollout is likely within the next 15 days.
Under the Karnataka Motor Vehicles Taxation (Amendment) Act, 2026, EVs will attract a lifetime road tax at the time of registration, ranging from 5 per cent to 10 per cent of the vehicle cost depending on price slabs. Electric cars priced up to ₹10 lakh will be taxed at 5 per cent, those between ₹10 lakh and ₹25 lakh at 8 per cent, and vehicles costing above ₹25 lakh will attract 10 per cent.
The state govt expects to generate around ₹249 crore in revenue from this move. Since 2016, Karnataka has offered lifetime tax exemption to promote green mobility. However, in 2024, cars priced above ₹25 lakh were brought under the tax net with a 10 per cent levy. The latest proposal expands the tax to cover all electric car segments.
The move has drawn criticism from the opposition, with BJP calling the move a regressive step that could slow EV adoption.
Bangalore South MP Tejasvi Surya, in a letter to the chief minister, said the policy runs counter to the broader national goal of accelerating electric mobility. He warned that instead of encouraging adoption, the tax could discourage consumers and affect the growth of the EV ecosystem. He also pointed to central initiatives such as FAME India and PM E-Drive aimed at boosting EV adoption.
“Rather than incentivising adoption, it risks discouraging consumers and slowing the growth of the EV ecosystem in the state,” he said, adding that govts like Delhi are promoting EV adoption by offering full road tax waivers for electric cars costing below ₹30 lakh, while Karnataka appears to be moving in the opposite direction to increase revenue.
Electric car manufacturers have also raised concerns over the proposal and urged the govt to roll back the decision, warning that it could slow down the transition to cleaner mobility.