Karnataka EV Tax Amendment Bill 2026 Introduces One-Time and Age-Based Tax Slabs
Karnataka may tax EVs under new lifetime slab system.
Electric vehicle (EV) buyers in Karnataka may soon face higher costs as the state government prepares to withdraw the existing road tax exemption on battery-operated cars. The proposed Karnataka Motor Vehicles Taxation (Amendment) Bill, 2026, aims to introduce a separate tax framework for EVs across multiple categories, including private cars, jeeps, omnibuses, and cabs.
Under the current system, EVs are largely taxed under general private vehicle categories, attracting rates between 13% and 18% of the vehicle cost, though buyers have enjoyed a full exemption. The new bill proposes structured lifetime tax slabs specific to EVs, marking a significant shift in the state’s approach to electric mobility taxation.
If passed, the legislation will impose a one-time tax of 10% on EVs priced up to Rs 10 lakh, 12% on vehicles costing between Rs 10 lakh and 20 lakh, and 14% on battery-operated vehicles priced above Rs 20 lakh. The tax will be collected as a lump sum at the time of registration or when vehicles are migrated into Karnataka, in accordance with Section 4(3) of the Act.
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The bill also introduces age-based depreciation for EV taxation, starting at 93% of the vehicle’s assessed value in the first year and declining to 25% over a 15-year period. Vehicle owners will be able to claim refunds on lifetime tax in cases of scrapping, interstate transfer, or deregistration, with the refundable amount following the same declining scale.
Officials estimate that the amendment package could generate around Rs 250 crore in revenue for the state. Lawmakers have highlighted that the proposed framework is intended to create a more equitable and transparent tax structure for EVs while still encouraging their adoption over conventional fuel vehicles.
The bill is currently awaiting clearance by the Governor of Karnataka to become law. Once implemented, it is expected to affect EV buyers and fleet operators across the state, prompting adjustments in pricing and purchasing decisions for battery-operated vehicles.
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