Maharashtra Budget 2025: Four-Wheeler Prices to Rise as Ajit Pawar Proposes Vehicle Tax Hike

In the state budget for the financial year 2025-26, a substantial provision of Rs 20,165 crore has been allocated under the District Annual Plan, marking an increase of Rs 2,000 crore from the previous year. Revenue collection is estimated at Rs 5,60,964 crore, while revenue expenditure is projected at Rs 6,60,855 crore, resulting in an estimated deficit of Rs 45,891 crore. To address this shortfall, Finance Minister Ajit Pawar has proposed an increase in vehicle tax and stamp duty, delivering a significant financial jolt.

Currently, privately owned non-transport four-wheelers running on CNG and LPG are taxed at a rate of 7 to 9 percent, depending on the vehicle type and price. The budget proposes a 1 percent hike in these rates, which is expected to generate an additional Rs 150 crore in revenue during 2025-26.

Additionally, a new motor vehicle tax of 6 percent will be levied on electric vehicles priced above Rs 30 lakh. The upper limit for motor vehicle tax has also been raised from Rs 20 lakh to Rs 30 lakh, a move anticipated to bring in Rs 170 crore in revenue. Vehicles used for construction purposes—such as cranes, compressors, projectors, and excavators will now be subject to a 7 percent motor vehicle tax, contributing an estimated Rs 180 crore to state revenue. Furthermore, light commercial vehicles carrying goods up to 7,500 kg will also be taxed at 7 percent, generating an additional Rs 625 crore.

Stamp Duty Increase

Under Section 4 of the Maharashtra Stamp Act, if multiple documents are used to complete a single transaction, the stamp duty on additional documents will be raised from Rs 100 to Rs 500. Additionally, the state government has proposed increasing the standard stamp duty charged on a document from Rs 100 to Rs 1,000.

Impact on Vehicle Prices

With the increase in motor vehicle tax, consumers purchasing vehicles in the coming months are likely to face higher costs. The difference between the ex-showroom price and the on-road price will widen as state-imposed motor vehicle taxes rise, directly impacting car prices.