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Now get road tax refunded when you shift house

Vehicle owners who are permanently shifting their residences can now get a refund of their road taxes when they apply for a no-objection certificate (NOC).

The NOC from the Road Transport Office (RTO) or Department is required to move the vehicle from one state to another and to re-register their vehicles in a new place.

Till now, the only option for vehicle owners was to forget about the tax that they have already paid and pay the taxes of the place that they are moving to.

State governments levy road taxes when a vehicle is registered with them, irrespective of whether the vehicle owner had paid road taxes on the same vehicle in another state.

Without paying the road tax, state governments do not allow registration of the car, or any other vehicle.

With the amended Motor Vehicles Act, the government of the state from where the person is shifting out has to mandatorily refund the remaining road tax paid by the person.

Most state governments levy taxes in advance for 15 years. The government of the state to which the person is relocating will charge only the tax that is pro-rated to the remaining validity of the vehicle’s registration — less than 15 years.

Road taxes range from about 5% to more than 15% of the vehicle’s price and can run into lakhs of rupees for mid to high-end cars and bigger vehicles.

The amendment to the Motor Vehicle Act was passed by Rajya Sabha on 08th May, 2012.

It adds new section, 49A, which reads as under:

“Where an owner of a motor vehicle (other than transport vehicle) on which one-time or long-term tax has been paid, ceases to reside at the address recorded in the certificate of registration of the vehicle on account of his transfer on official duty or shift of residence, the registering authority shall, where the vehicle was registered prior to such transfer or shift of residence, on application for no objection certificate under section 48, refund the pro-rata unutilized tax on the vehicle; and the registering authority where the vehicle is being shifted shall levy and collect pro-rata tax for the remaining valid period of registration of such vehicle.”

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