Tax Collection And Revenue Generation 

RTO collects the tax and generates revenue from the vehicles in the form of Road Tax, Registration Fees, Permit fees and others. The government uses these taxes to make infrastructure to construct new highways, motorways and repair the existing roads to facilitate the public.

RTO collects the taxes through the following ways:

• Driving license fee 
• Registration of a vehicle 
• Collection of motor vehicle taxes 
• fitness and pollution fees
• penalty in the form of a challan/ fine
• Auctions fancy / VAH registration.

Sources To Generate  Revenue 

1. Token tax and registration fee
      It is imposed on the vehicle according to the engine 
      size and time status like lifetime/ commercial 


2. License, Permits, and Fitness Fees
     These charges are for the route permit, vehicle license 
      and Fitness certificate fees.


3.   Fines and challans
       E- e-challan system has boosted the revenue significantly


4. Fancy Number Auctions 
    Fancy number Auctions also generate a good amount in 
    In this regard, the achievement of Pune is remarkable 
    With the collection of INR 50 crore.


5. Passenger Tax 
     There is also good potential in the passenger Tax. The 
     Kashmir has seen a rise in revenue of up to 630% in passenger tax.

 A collection of fines for overloading and the fitness of the 
  The vehicle has strengthened the revenue streams.




  Digital system adoption 

    E-registration, E-challan, and the Automated System have Improved the system of compliance 

vehicle tax

  Here are a few states of India with their growth rate 


    1. Uttarakhand:
       RTO collected INR 1425.39 crore in FY 2024- 25

2. Patna: 
        It collected INR 3684 crore in 2024-25. Reported 
        10% annual rise. 

3.  Kashmir: 
         RTO Kashmir generated INR 313.47 crore with 20%
         Increments.

 4.   Indore, Madhya Pradesh:
          It collected INR 891.18 crore. Increased 57% 
          In comparison to FY 2021- 22.

5.   Pune, Maharashtra: 
            Auctions raised INR 50 crore in FY 2023- 24.

6.   Nagpur Maharashtra: 
           RTO registered 96,457 vehicles. It contributes INR 
           318.90 crore in registration taxes. Total revenue hits
           INR 422.88 crore including fines and fees.