The Telangana government has announced the introduction of a Road Safety Cess on new vehicle purchases from March 1 to generate dedicated funds for traffic management and accident prevention. The cess, ranging between Rs 2,000 and Rs 10,000 depending on vehicle category, is expected to raise Rs 270 crore annually.
Published Date – 26 February 2026, 12:43 PM
Hyderabad: The State government is introducing a Road Safety Cess on the purchase of new vehicles from March 1, with an aim to raise dedicated funds for strengthening traffic management and accident prevention systems.
Orders formalising the decision were issued by the Transport Department late on Wednesday under the provisions of the Motor Vehicles Act.
The cess will be collected at the time of registration of non-transport vehicles. Officials said the additional levy has been structured based on the vehicle category, with rates ranging from Rs 2,000 to Rs 10,000.
The government estimates that the measure will generate nearly Rs 270 crore annually. The funds will be utilised to improve road engineering, upgrade black spots (accident-prone areas), enhance emergency response services, and support awareness campaigns on road safety.
In a parallel reform, three-wheeler goods vehicles have been shifted from the quarterly tax payment system to a Life Tax model to simplify taxation procedures. Tractors and trailers used exclusively for agricultural purposes have been exempted from the Road Safety Cess.
Passenger autos with a seating capacity of four to seven persons will be classified under the “Other Non-Transport Vehicles” category for cess purposes.
Officials said the initiative forms part of a broader plan to curb rising road accidents and build a safer transport ecosystem across the State.
