Maharashtra Vehicle Tax Hike up to ₹10 Lakh: Impact on Car Buyers and EV Benefit

According to a Times of India report, starting July 1, 2025, car buyers in Maharashtra will pay higher one-time vehicle taxes, with the government increasing levies by up to ₹10 lakh. This move especially impacts those purchasing CNG, LNG, and high-end petrol or diesel vehicles, while EVs remain exempt to encourage clean mobility adoption.

Revised Tax Slabs: How Much Will You Pay Now?

Under the new structure, non-transport CNG and LPG vehicles now face a 1% increase in their one-time motor vehicle (MV) tax. 

For example, a ₹10 lakh CNG car now incurs a tax of ₹80,000 over the earlier ₹70,000, while a ₹20 lakh vehicle gets taxed ₹1.6 lakh, up from ₹1.4 lakh. 

The state has also raised the MV tax cap from ₹20 lakh to ₹30 lakh, aiming to generate ₹170 crore in FY 2025-26. Light goods vehicles weighing up to 7,500 kg will now pay a 7% lump sum MV tax, estimated to add ₹625 crore in revenue.

Petrol and Diesel Car Taxation Remains Steep

The tax slabs for personal-use petrol and diesel cars have been maintained but remain significant. Petrol cars costing under ₹10 lakh attract 11%, ₹10 to ₹20 lakh vehicles face 12%, while those above ₹20 lakh are taxed 13%. Diesel vehicles are taxed even more steeply: 13% for cars under ₹10 lakh, 14% for ₹10 to ₹20 lakh, and 15% for vehicles above ₹20 lakh. 

Additionally, imported or company-registered vehicles incur a flat 20% tax rate, regardless of fuel type or cost.

Read More: What are Changes in GST Compliance Effective July 1, 2025?

Exemption Boosts Adoption of Electric Vehicles

Electric vehicles remain completely exempt from the motor vehicle tax in Maharashtra. This tax-exemption strategy is in place to incentivise the adoption of eco-friendly transport options, aligning with broader national and state-level green goals. As a result, EVs become even more financially appealing in comparison to their fossil-fuel-powered counterparts under the new tax policy.

Revenue Implications and Budget Alignment

This tax hike follows provisions set in the Maharashtra state budget and aims to significantly boost revenue. The state expects combined earnings of up to ₹795 crore for FY 2025-26 from the revised tax regime on vehicles. With over 17 lakh CNG and LPG vehicles already on the roads, the increased tax is estimated to have a substantial fiscal impact without directly affecting the electric mobility ecosystem.

Conclusion

Maharashtra's tax revision introduces higher MV taxes on CNG, LNG, and high-end fuel vehicles, with some increases reaching ₹10 lakh. Petrol and diesel vehicles continue to be taxed at steep rates, while EVs remain fully exempt. With strong revenue implications, the move also reinforces the state's clean mobility agenda.

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