The significant hike in road tax for registering vehicles in the city has come with a pleasant surprise. From now on, the Registering and Licensing Authority (RLA) will calculate the road tax on the cost of the vehicle instead of the ex-showroom price (total cost of vehicle which also includes 12 per cent Value Added Tax) of the vehicle.

In fact, this has been a long-pending demand of the city residents. Punjab has already adopted this norm from September 2012.

Speaking with Chandigarh Newsline, Deputy Commissioner Mohammad Shayin said, "With this, we have tried to rationalise the road tax. Those who buy high-end vehicles get to pay more and those who buy mid-segment vehicles will have to shell out less."

With the introduction of two slabs for road tax, Chandigarh has joined the league of Delhi and Punjab which had introduced the uniform slabs last year.

From Monday onwards, for registering a four-wheeler costing above Rs 20 lakh, one will have to pay 8 per cent of the cost of the vehicle as road tax in the city.

Similarly, for two-wheelers costing upto Rs 1 lakh, one will have to pay 3 per cent and for two-wheelers costing between Rs 1 lakh and Rs 4 lakh, one will have to pay 4 per cent as road tax, and for those costing above Rs 4 lakh, one will have to pay 5 per cent of the cost of the vehicle as road tax.

The significant hike in road tax has brought the UT on a par with the neighbouring state of Punjab while Haryana proves to be the cheapest when it comes to paying road tax in the region.