Budget 2025-26; Token tax update for Suzuki Alto & other 1000cc cars

The Punjab Excise and Taxation Department continues to collect Motor Vehicle Tax (MVT) from citizens across the province. This includes the token tax for all motorcycles and cars, which is a key source of income for the provincial government.

Under the Motor Vehicle Ordinance, 1965 and Motor Vehicle Tax Act, 1958, the department collects tax based on the type, engine size, and age of the vehicle. While most vehicle owners pay token tax annually, those with cars having engine capacities up to 1000cc are required to pay a lifetime token tax.

Which Cars Fall Under This Tax Category?

Popular cars in the under 1000cc category include:

• Suzuki Alto 660cc

• Suzuki WagonR 998cc

• Suzuki Cultus

• Kia Picanto

Owners of these vehicles are charged a one-time lifetime token tax.

Current Token Tax Rate for Cars Up to 1000cc

As per the Punjab Budget 2024-25, the lifetime token tax for this category is Rs20,000. This rate is applied at the time of registration when a person buys a new car.

What If the Vehicle Is Transferred?

If a car with an engine capacity up to 1000cc is transferred to another owner within 10 years, a transfer fee of Rs20,000 is charged.

However, a 10% rebate is provided for each financial year since the original registration. For example:

• Transfer after 1 year: Rs18,000

• Transfer after 2 years: Rs16,000

• And so on…

What to Expect in Budget 2025-26?

The Punjab government is expected to announce the budget for the fiscal year 2025-26 later this month. It is unclear whether the token tax rate for vehicles up to 1000cc will change in the upcoming budget.

Vehicle buyers are advised to complete their registration early to avoid potential increases in tax.