BH vs Normal Registration: Which Saves You More on Road Tax

Over a cumulative period of 15 years of the vehicle's lifespan, the road tax amount for both a BH series and normal registration vehicle is almost similar. However, BH registered vehicles may save more on taxes when they move between states. The BH registration introduced in 2021 allows eligible vehicle owners to avoid re-registration when moving between states and pay motor vehicle tax in instalments. 
For normal registrations, the vehicle is registered in the state where it is purchased, and entire road tax for the vehicle's lifespan is paid upfront as per the state’s rules. Keep reading as we delve deeper into a detailed comparison of BH registration and normal registration and uncover which option can help you save more on road tax.

Does BH Registration Save More on Road Tax Than Normal Registration?

BH registration does not necessarily reduce the total road tax payable. Its advantage is that it allows eligible vehicle owners to spread tax payments over time instead of paying a large amount upfront.
Under normal registration, vehicle owners generally pay road tax at the time of registration based on the state’s applicable rules. If they later move the vehicle to another state beyond the permitted period, they may need to complete re-registration procedures and pay applicable taxes again.

According to Swapnil Bhosale, deputy regional transport officer, “Under the BH series, vehicle tax is paid for a period of 2 years at a time, which is different from the conventional system of long-term tax payment. While this offers flexibility, it also requires vehicle owners to be disciplined about timely payments”.

Also Read: How to Get a BH Number Plate: Eligibility, Registration & Cost Required

BH Registration vs Normal Registration: Key Differences

Also Read: Benefits of Bharat Series (BH) Number Plate

How Is Road Tax Calculated For BH Registration?

BH Series road tax calculation is based on the vehicle’s invoice price. Invoice price refers to the pre-tax vehicle cost excluding GST/Cess. The applicable tax slabs are:

Additional adjustments apply depending on the fuel type:

●    Diesel vehicles attract an additional 2% tax
●    Electric vehicles receive a 2% discount on applicable rates

For example, if a vehicle costs ₹15 Lakh:
●    Applicable BH tax rate: 10%
●    Base calculation: ₹15 Lakh × 10% = ₹1.5 Lakh

This tax value will be converted into repayments to be made every two years.
●    Formula: 2-year tax payable = (15 year road tax x 1.25 x 2) / 15

Where, 1.25 = 25% government surcharge applied for deferred instalment payments
2 = The 2-year payment period (biennial block)
15 = Standard 15-year registration validity period for non-transport vehicles, i.e. motor vehicles used solely for personal purposes. E.g. private cars and personal motorcycles. 

●    2-year tax payable = (1,50,000 x 1.25 x 2) / 15
= ₹25,000

BH series tax is paid every 2 years for the first 14 years, and then annually starting from the 15th year onwards at half the rate.

How Is Road Tax Calculated For Normal Registration?

Normal registration follows the road tax rules of the state where the vehicle is registered. It is typically levied on the ex-showroom price (inclusive of GST/Cess). Each state has its own method for calculating road tax. You can estimate your vehicle road tax directly using the official VAHAN Road Tax Calculator Portal.

The following example helps to understand the simple calculation:

If a state applies a 10% road tax on a ₹15 Lakh vehicle:
●    Road tax payable = ₹15 Lakh × 10% = ₹1.5 Lakh
●    The full ₹1.5 Lakh must be paid upfront in one lump sum payment.

Also Read: Understanding the GST Calculation on Buying and Selling Used Cars

Which Registration Should You Choose?

The right choice of vehicle registration depends on factors such as your vehicle cost, state tax structure, ownership period, and whether you frequently relocate. 

When to Choose BH Registration
The BH Series was introduced to make vehicle ownership easier for individuals who frequently move between states. Choose BH registration if you:

●    Relocate Frequently: BH registration is useful for individuals who move between states due to transferable jobs.
●    Want Lower Upfront Expenses: Paying road tax in instalments can reduce the immediate financial burden of buying a vehicle.
●    Require Nationwide Validity: You can avoid the need for re-registration when shifting states with a BH registration.

When to Choose Normal Registration
Standard state registration remains the traditional, universally available path for car buyers. Choose normal registration if you:

●    Stay Mostly in One State: Regular registration may be simpler if you do not expect to relocate.
●    Prefer One-Time Payment: Some buyers may prefer paying road tax upfront instead of managing periodic payments.
●    Are Not Eligible for BH Registration: Normal registration remains available to all vehicle owners.

To Conclude

BH registration does not always mean lower overall road tax. Its primary advantage is flexibility, as it allows eligible vehicle owners to pay tax in instalments and avoid re-registration when moving between states. On the other hand, normal registration may be more suitable for individuals who plan to remain in the same state and prefer a one-time payment process.

Before choosing between BH and normal registration, consider your eligibility, relocation plans, vehicle cost, and preferred payment approach.

Frequently Asked Questions

Which is cheaper, BH or normal registration?
BH registration can be cheaper upfront, but total tax payable is usually comparable to normal registration. The main advantage of BH registration is that it allows eligible vehicle owners to pay road tax in instalments and avoid re-registration when moving between states.

What are the disadvantages of BH number vehicle road tax?
The disadvantages of BH registration include limited eligibility and the possibility that it may not always reduce the overall road tax compared to normal registration. Vehicle owners must also remember renewal deadlines every two years or the applicable period to avoid payment-related issues.

Is there any benefit of a BH number plate?
Yes, a BH number plate offers benefits such as nationwide validity and no requirement for re-registration when moving between states. It is particularly useful for eligible vehicle owners who frequently relocate, and allows road tax payment in instalments instead of a large upfront payment.