Karnataka government imposes lifetime tax on yellow board vehicles under ₹10 lakh

In a major development, the Karnataka government has introduced a lifetime tax (LTT) for vehicles with yellow board registration, applicable to purchases under ₹10 lakh. The new regulation, which came into effect from May 1, has taken vehicle owners by surprise. Previously, owners of yellow board vehicles were required to pay ₹100 per seat every three months.

However, the amended tax policy mandates a 5% lifetime tax on vehicles costing less than ₹10 lakh. As a result, owners of such vehicles will now be required to pay a one-time tax of ₹50,000 for each vehicle purchased within this price range.

This decision has left many new buyers of yellow board vehicles feeling the financial strain. The tax hike also extends to vehicles used for commercial purposes, including construction material shifting vehicles and electric cars.

For commercial electric vehicles priced over ₹25 lakh, a 10% tax will apply, amounting to ₹2.5 lakh. Previously, vehicles in this price range were exempt from tax, but under the new regulation, this exemption has been lifted. In addition, the lifetime tax on shifting vehicles used for construction materials has increased from 6% to 8%. The new tax structure is expected to generate additional revenue for the state government but has been met with criticism from vehicle owners who argue that the financial burden is excessive. The Karnataka Governor has already approved the amended motor vehicle tax regulation, and the new policy is set to impact a wide range of vehicle owners across the state.