Toll Tax Rules in India: A Detailed Guide
- Rajesh Kumar Kar
- Sep 17
- 9 min read
Roads, usually highways, have toll plazas where drivers must pay a toll tax before they can use the road. The Indian government levies taxes on virtually all state and national highways to generate funds for safety measures, infrastructure improvements, and road maintenance. India's toll tax regulations, which place a strong emphasis on waiting time limitations and FASTag usage, often specify how toll fees are determined and collected.
Table of Contents
What is the Toll Tax in India?
Road charges, also referred to as "tolls," are the taxes you pay when you use national or state highways, bridges, tunnels, and interstate motorways. In India, the National Highway Authority of India (NHAI) is responsible for managing the entire road network, including the implementation of the laws and procedures governing toll taxes. The collection process is determined by a number of rules and regulations established by NHAI. These rules address several different subjects. These may include specific tax exemptions, tax validity, the methodology used to calculate road fees for a given route or motorway, and much more.
Features of Toll Tax
The government imposes numerous taxes, one of which is the toll tax. As a maintenance fee, they collect money from drivers who use these roads. The key characteristics of India's toll tax are listed below:
Services are subject to indirect taxes, including toll taxes. Therefore, the individuals (their income, capital gains, revenue, etc.) are not charged for it.
Road construction and maintenance are funded by toll taxes. Therefore, it charges the toll tax to finance the costs of newly constructed toll roads. Additionally, it charges for toll road maintenance.
The road tax that the RTO typically collects from car owners is not a toll tax. Instead, it is the tax levied by the NHAI for the use of roads that cross national and state highways. It should be mentioned that only four-wheelers or larger vehicles passing by on these toll roads are subject to the toll tax amount imposed by the NHAI.
The NHAI distributes the money it receives from the toll levy to a number of private individuals and businesses. Therefore, the latter is in charge of maintaining a specific road segment, or what is commonly referred to as "one project of toll road."
A toll booth or toll plaza that issues a receipt for the payment is where toll taxes are collected. In addition, the private companies in charge of toll plaza maintenance are in charge of providing restrooms, water supplies, and emergency services in the event of an accident or fire.
The toll is gradually reduced. The toll fee is meant to pay for the construction of a new highway or road. Nevertheless, only the maintenance price is subsequently assessed at a 40% toll tax reduction.
Why is Toll Tax Collected?
India boasts one of the biggest road systems in the world. The purpose of collecting road taxes or fees is to guarantee that money is continuously produced for road upkeep and repair. Therefore, a paying station is frequently placed on roads, and the money collected from taxes is utilised to upgrade infrastructure and preserve road quality to guarantee rapid distance coverage. But not all highways, bridges, tunnels, or motorways have the same fees.
Toll Tax Rules in India
The NHAI has established specific guidelines regarding road charges, even though they are an excellent method of maintaining the calibre of road networks. Before collecting toll charges, certain regulations must be considered. These are:
Tax Rates: In accordance with NHAI regulations, all booths must have fixed, equal taxes. The type of vehicle, the distance driven, and the time of day must all be taken into consideration when calculating the amount or rate.
Location: It is not permitted to construct toll plazas at any point along the road. They need to be built as carefully as possible to prevent heavy traffic or public safety issues. The impact on the environment should also be considered before selecting a location.
Tax Exemption List: According to official tax-collecting regulations, some particular vehicle classifications are exempt from paying any road fees in any situation. These consist of public transportation, military vehicles, and emergency vehicles.
Collection Methods: There are several ways to pay for road charges, including cash or electronic payments, at any booth across the nation. Having the right technology in place is crucial for effective and efficient tax collection.
These are some of the most important toll tax regulations about road fees that one needs to be aware of. In order to maintain public safety and road conditions, these regulations ensure that road fees are collected honestly.
Note: The first 20 km of a private vehicle's daily trip on national highways will henceforth be toll-free for owners who have a working Global Navigation Satellite System (GNSS). Tolls will be assessed according to the actual kilometres travelled beyond this point. This update comes after the National Highways Fee Rules, 2008, were revised by the Ministry of Road Transport and Highways. The current FASTag system will be enhanced by the GNSS-based system.
Toll Tax Charges in India
Road fees for different road networks might differ depending on a number of factors. Strict rules have been established by the NHAI to establish the fees at any booth in India.
Vehicle Type: The tax levied is determined by the size of the car. This implies that compared to cars, heavy vehicles like trucks and buses will incur higher fees. This is because, in comparison to tiny vehicles, big vehicles do more damage on the roadways.
Capacity to Load: Another important consideration when calculating a car's road charge is its load capacity. Roads are more damaged by vehicles with greater load capacities, and vice versa.
Passenger Car Unit: The ability of a vehicle to transport passengers is another factor used to determine the road fee. According to the Indian government, two-wheelers are exempt from paying tolls, and pedestrians are not subject to the toll fee.
Therefore, the toll charges for any given vehicle are established and assessed depending on these parameters. Nearly every road network in India complies with these regulations.
Toll Tax Calculation
The size and carrying weight of a vehicle determine the toll tax rate. The vehicle's intended use (personal or business) is also taken into account when calculating the toll tax fee. In addition, the following variables affect how the toll tax is calculated:
The NHAI considers the potential harm that heavy vehicles may bring to the road, including the weight of the vehicles, such as trucks or buses, when determining toll tax rates.
The vehicle's size also affects the PCU (Passenger Car Unit), which is used to compute the toll charge, in addition to its load capacity.
There is no toll levy for pedestrians or two-wheeler owners due to the reasons outlined in the first two sections. Vehicles with fewer than one PCU (Passenger Car Unit) also do not need to pay toll tax, according to Indian government regulations. Two-wheeled vehicles and bikes are interchangeable. They are therefore exempt.
More PCUs are found in four-wheelers, such as vehicles, trucks, buses, etc. Additionally, they are heavier, carry heavier loads, and cause more road damage. As a result, the NHAI charges them a higher toll tax. Trailers have six PCUs, whereas buses and trucks have three to four.
Toll Tax Collection Through FASTag
FASTags were adopted by the Indian government to promote electronic toll collection, which is a novel and efficient method of collecting toll taxes. For cashless toll tax payments, FASTags employ RFID (Radio Frequency Identification) technology. As the car gets closer to the toll booth, money is automatically taken out of the person's bank account. Additionally, FASTags are now required for all four-wheeled vehicles as of February 15, 2021. The FASTags are run by 35 national banks under the direction of the National Payments Corporation of India (NPCI). In addition to making digital payments possible, using FASTag saves time and gasoline because a passerby does not have to stop at each booth.
Exceptions to Toll Tax in India
Undoubtedly, the NHAI stipulates that all users of the road must pay taxes equally. However, there is a list of cars that are excluded from paying the toll due to specific categories. The NHAI states that you are exempt from paying any road fee at any booth in India if you fit into any of the five categories listed below:
Fire departments, ambulances, and other emergency vehicles are exempt from paying road taxes when they enter the booth.
Additionally, trucks, army cars, and other vehicles directly under the management of the military department are exempt from paying any toll taxes.
Road fees are waived for VIP cars transporting or accompanying high-ranking officials, including the president, prime minister, chief ministers, members of parliament, and judges of the Supreme Court.
According to the NHAI regulation, public transit, including state buses, is free from paying road charges.
Finally, two-wheelers are not included in the taxpayer list. Therefore, there is no fee for any two-wheeler utilising the road to cross the booth.
The first 20 km of a private vehicle's daily trip on national highways will henceforth be toll-free for owners who have a working Global Navigation Satellite System (GNSS).
Validity Time for Toll Tax
Rules pertaining to the duration of road fee validity have also been established by the NHAI. In general, these regulations are advantageous for those who travel frequently. According to the validity time rule, only one and a half times the total road charge must be paid if the car goes by the booth twice in 24 hours. According to the regulations, more frequent passengers are only required to pay two-thirds of the total booth tax amount. This sum is good for a maximum of 50 trips within 30 days of the payment date.
Advantages and Disadvantages of Toll Tax
The main benefits and drawbacks of the toll tax are listed below. Let's examine them in more detail:
Benefits of the Toll Tax
Superior Roads: Road fee collection guarantees enough money to keep roads in good condition. This guarantees that the roads are consistently maintained and cared for to make travelling easier.
Extremely Safe Travel: A well-kept road guarantees fewer collisions, thus enhancing traveler safety.
Drawbacks of Toll Tax
Expensive: Road usage fees may be required; however, frequent travellers may find them to be an inconvenience. Furthermore, using these roads might be costly and will simply increase the overall expense of the trip for the travellers.
Difference Between Toll Tax and Road Tax
The table below lists the main distinctions between road tax and toll tax:
Factor
| Road Tax
| Toll Tax
|
Objective | Tax on vehicles for registration and use | Fee for using specific roads or highways |
Coverage | All registered vehicles | Only on designated roads and highways |
Collection Authority | State Transport Department | National Highways Authority of India (NHAI) |
Collection Method | Collected by state authorities | Collected at plazas with electronic collection systems such as FASTag |
Payment Timeframe | One-time payment at the time of vehicle registration | Payable each time the road/highway is used |
Calculation | According to vehicle size, cost, age, engine capacity, load capacity etc. | According to vehicle type, size, load, distance travelled, passenger car per unit, and location of the toll plaza |
Revenue Usage | For state revenue, and road development and maintenance | For the development and maintenance of specific roads |
Exemption | Some categories may be exempted based on government policies, such as electric vehicles | Emergency service vehicles, government-owned vehicles, defence vehicles, VIP convoys, and certain categories of individuals according to policies |
Conclusion
In India, toll booths are an excellent method of keeping the country's road systems current and functional. Gaining a thorough understanding of the toll taxation regulations is advantageous since it enables the average citizen to benefit from any exemptions or relaxations granted by the government.
FAQs
Q1. Who collects toll tax in India?
In India, the toll tax is administered, collected, and overseen by the National Highways Authority of India (NHAI).
Q2. What is the toll tax rate in India?
In India, toll prices might differ depending on a number of criteria, including the kind of vehicle and the roads that buses and other forms of transportation travel more or less frequently. For instance, the tax paid by a car entering a toll booth will be significantly lower than that paid by a truck or bus.
Q3. When was the toll tax system initiated in India?
Since the British rule in India, road taxes have been collected. Road levies were first implemented in 1851 with the passage of the Indian Tolls Act.
Q4. Are army personnel exempt from toll tax?
Army personnel are indeed exempt from paying toll taxes. Vehicles utilised for activities like fulfilling their principal duty in the military sector are exempt from this rule.
Q5. Do residents need to pay toll taxes?
While certain Indian cities provide residents with toll breaks or exemptions from tolls, this is not the case nationwide. However, because of certain agreements relating to the legal dispute between the public and private sectors, other states may offer exemptions and reduced fees to their citizens.
Q6. What is the 60 km toll rule?
The 60 km rule notes that cars crossing a toll plaza within 60 km of the last toll plaza on a specific are not required to pay toll tax. This rule looks for several taxes that are due on shorter trips using this method of transportation.
Q7. What if I don't pay the toll tax?
Your licence won't be renewed if you don't pay the toll tax until the outstanding balance is settled. Additionally, if the RTO finds out and takes action against you, your registration can be cancelled. In addition, additional fines will likely increase the toll charge.
Q8. Can I pay toll tax without a FASTag?
It is possible to pay toll tax without a FASTag. However, the toll rates will be doubled.
