Bengaluru: The Karnataka Motor Vehicles Taxation (Amendment) Bill, 2026, aimed at attracting vehicle registrations within the state and rationalising taxes, will come into force from May 1.
The bill received approval during the legislative session held on March 25 and was assented to by the Governor on April 9. A notification was issued on April 10, and the state government has now announced its implementation from May 1.
Under the amendment, tax rates for contract carriage vehicles and sleeper coach buses carrying more than 12 passengers have been reduced. The tax per seat for such vehicles has been cut by Rs 1,000.
Currently, vehicles carrying more than 12 passengers for hire are taxed at Rs 3,500 per seat, while sleeper coach buses are taxed at Rs 4,000 per seat. These rates have now been reduced to Rs 2,500 and Rs 3,000 per seat, respectively.
The move comes as several vehicle owners were registering vehicles in other states such as Puducherry, Daman and Diu and Arunachal Pradesh, where registration charges and taxes are lower, and operating them in Karnataka. This had led to revenue losses for the state.
With the revised tax structure, the government expects to generate Rs 250 crore in revenue during the financial year 2026-27.
Lifetime tax for electric vehicles
The amendment also introduces lifetime tax for electric vehicles. New electric vehicles priced below Rs 10 lakh will attract a lifetime tax of 5 per cent of the vehicle cost.
Electric vehicles priced between Rs 10 lakh and Rs 25 lakh will be taxed at 8 per cent, while those priced above Rs 25 lakh will attract a 10 per cent lifetime tax.
Additionally, battery-operated motor cabs registered outside the state but operating in Karnataka will also be subject to the same lifetime tax structure under the new provisions.