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Under the new structure, electric cars priced up to Rs 10 lakh may attract a 5% tax, while those in the Rs 10 lakh to Rs 25 lakh range could be taxed at 8%
The proposed shift comes at a time when India is accelerating its push towards electric mobility. (PTI Photo)
Buying an electric vehicle in Karnataka could soon pinch the pocket a little more, as the state government moves to roll back the full road tax exemption currently available on battery-operated cars. Electric two-wheelers, however, are likely to remain unaffected by this change, said a Times Of India report.
The proposed shift comes at a time when India is accelerating its push towards electric mobility, even as concerns grow over a possible spike in fuel prices triggered by tensions in West Asia.
The plan is part of the Karnataka Motor Vehicles Taxation Amendment Bill, 2026, cleared in the recently concluded legislative session and now awaiting the governor’s approval. Once notified, the changes will impact the one-time lifetime tax paid at the time of purchasing a new vehicle.
Under the new structure, electric cars priced up to Rs 10 lakh may attract a 5% tax, while those in the Rs 10 lakh to Rs 25 lakh range could be taxed at 8%. Vehicles priced above Rs 25 lakh will continue to draw a 10% tax, with no proposed revisions in that category. To put it in perspective, a car priced at Rs 20 lakh could see a tax burden of around Rs 1.6 lakh, said the TOI report.
Defending the proposal, transport minister Ramalinga Reddy reportedly said, “the tax will apply only to new vehicles and not retrospectively.”
The move signals a broader recalibration of policy as the government seeks to strengthen its revenue base amid rising expenditure on flagship guarantee schemes. For the financial year 2026-27, the transport department has been assigned a target of Rs 15,500 crore, which is Rs 500 crore higher than the previous year. Officials estimate that bringing electric cars across price segments under the tax net could generate approximately Rs 259 crore annually.
This marks a clear shift from Karnataka’s earlier stance on electric vehicles. In 2016, the government had introduced tax exemptions to encourage the adoption of green mobility. More recently, in May 2024, it brought high-end electric cars under taxation by imposing a 10% lifetime tax on luxury models. The latest proposal goes a step further by extending the levy across all categories of electric cars.
Meanwhile, dealers have begun informing customers about a possible rise in on-road prices, including those who have already placed advance bookings.
April 01, 2026, 19:59 IST
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