Punjab proposes higher token tax on large vehicles, raises electric vehicle concession to 99%

The Punjab government has proposed increasing token tax on large private vehicles and commercial loader vehicles under the Finance Bill 2026-27, while raising the tax concession for electric vehicles from 95% to 99%.

For private vehicles with engine capacity exceeding 1,000cc but not exceeding 2,000cc, a token tax has been proposed at 0.3% of invoice value, up from the existing 0.2%.

For vehicles above 2,000cc, the rate has been proposed at 0.4% of invoice value, compared with the current 0.3%.

The bill also proposes a threefold increase in the token tax on commercial loader vehicles.

Under the proposed structure, vehicles with a maximum laden capacity exceeding 4,060kg but not exceeding 8,120kg will be charged Rs6,600, compared with the existing Rs2,200.

Vehicles with a capacity exceeding 8,120kg but not exceeding 12,000kg will pay Rs12,000, up from Rs4,000.

Long trailers and other vehicles with a capacity exceeding 12,000kg but not exceeding 16,000kg will be charged Rs18,000, compared with the current Rs6,000.

Vehicles exceeding 16,000kg will be subject to a token tax of Rs24,000, up from Rs8,000.

The Finance Bill also proposes amendments to the Punjab Motor Vehicle Transaction Licensees Act, 2015, making all motor vehicle dealers withholding agents responsible for collecting and depositing taxes, duties and fees at the point of sale.

Under the proposed provisions, dealers will not be allowed to hand over vehicles to buyers unless registration has been completed, all applicable dues have been paid, and government-approved number plates have been affixed.

Dealers violating these requirements will be liable to pay the outstanding amount along with an equivalent penalty.

According to the government, the measure is aimed at curbing the use of unregistered vehicles, streamlining registration and improving law and order across Punjab.