Karnataka withdraws exemption, to slap lifetime tax on EVs, except two-wheelers

• ETtech

• Published On Apr 3, 2026 at 07:56 AM IST

Karnataka withdraws exemption, to slap lifetime tax on EVs, except two-wheelers

The Karnataka government has withdrawn the exemption from lifetime road tax for a range of electric vehicles (EVs) including cars, jeeps, buses and other private vehicles. The exemption, however, will continue for electric two wheelers.

The cash-strapped government has brought all EVs or battery-operated vehicles under the purview of this tax, which was earlier applicable only for vehicles priced at or above ₹25 lakh.

However, the tax rate will depend on the price of the vehicle. The buyer needs to pay 5 per cent of the cost of the vehicle as tax if it is priced under ₹10 lakh, 8 per cent if priced between ₹10-25 lakh, and 10 per cent if it is higher than ₹25 lakh.

For vehicles that are already registered, the owner has to pay between 93 per cent and 25 per cent of the lifetime tax, with the percentage of the levy tapering with age.

Additional revenues

The government has levied this tax on EVs by passing the Karnataka Motor Vehicles Taxation (Amendment) Bill, 2026, in March. The regional transport offices (RTOs) will start collecting the taxes after the government notifies them

Officials said this is purely a measure aimed at generating additional revenues and the government hopes to nan additional ₹250 crore from this.

The government has sought to levy this tax at a time when many are showing an interest in switching to EVs to deal with the uncertainties caused by war in the Persian Gulf.

“At a time when policy should be accelerating the transition away from fossil fuels and advancing climate goals, the Karnataka Congress government has chosen to levy lifetime taxes on electric vehicles – a regressive and counterproductive move,” Mysuru-Kodagu MP Yaduveer Wadiyar (BJP) said on a post on X.

The four state-run transport utilities are struggling with delays in the release of subsidies under the government’s Shakti scheme, which offers free rides for women in non-AC buses. The government has budgeted over ₹5,300 crore for this in FY27.