Complete Guide to Token Tax for Cars for Sale in Islamabad

The Token Tax is an annual tax that must be paid by the owner of every registered vehicle in Pakistan. In Islamabad, as in other parts of the country, this tax is mandatory for all motor vehicles, including cars, motorcycles, and commercial vehicles. It is essential for the car buyer and seller to understand how the token tax works, as it plays a significant role in the vehicle’s legal standing and transfer of ownership. Here’s everything you need to know about the Token Tax for cars for sale in Islamabad:

What is the Token Tax?

The Token Tax is an annual fee imposed by the Excise and Taxation Department for the ownership and use of a registered vehicle. The tax is applicable every year and must be paid by the vehicle’s registered owner. If the tax is not paid, the vehicle’s registration can be canceled, and the owner may face legal penalties.

Key Aspects of the Token Tax:

• Applicable to All Vehicles: This tax applies to all vehicles that are registered with the Excise and Taxation Department in Islamabad.
• Payable Annually: The token tax is an annual fee and needs to be renewed every year.
• Vehicle Category-Based: The tax amount varies based on the type, engine capacity, and value of the vehicle.

How to Calculate Token Tax for Cars in Islamabad?

The token tax amount is determined by several factors, including the engine capacity, age, and model of the vehicle. Generally, vehicles with larger engine capacities incur higher token taxes. Below is a simplified calculation method based on the type of vehicle:

1. Private Cars:

For private cars, the token tax is based on the engine displacement. The bigger the engine capacity, the higher the tax. Here’s a general guide:

• Below 1000cc: Around PKR 1,000 – 2,000 per year.
• 1000cc to 1300cc: Around PKR 2,000 – 3,000 per year.
• 1300cc to 1600cc: Around PKR 3,000 – 5,000 per year.
• 1600cc to 2000cc: Around PKR 5,000 – 10,000 per year.
• Above 2000cc: Around PKR 10,000 – 20,000 per year.

2. Luxury & Imported Cars:

Luxury and imported cars are subject to higher token taxes due to their value and engine size. These can range from PKR 10,000 to PKR 50,000 or more annually, depending on the car’s specifications.

3. Commercial Vehicles:

Commercial vehicles like trucks, buses, and vans also pay token taxes, but the rates may differ depending on their purpose, weight, and capacity. The Excise Department provides separate rates for such vehicles.

4. Motorcycles & Scooters:

Motorcycles generally have a much lower token tax compared to cars. The tax for motorcycles typically ranges from PKR 100 to PKR 500 per year based on their engine capacity.

How to Pay the Token Tax for Cars in Islamabad?

1. Online Payment:

The Excise and Taxation Department of Islamabad offers an online payment facility for the token tax. Here’s how to pay online:

• Visit the official Excise and Taxation Department’s website for Islamabad or the FBR portal.
• Navigate to the Token Tax section and enter the vehicle’s registration number.
• The system will provide details of the tax amount due.
• Choose the payment method (credit/debit card, bank transfer, etc.).
• Complete the payment and keep the receipt for your records.

2. Payment Through Bank:

Alternatively, you can pay the token tax through designated banks in Islamabad:

• Visit the nearest branch of the National Bank of Pakistan (NBP), Bank Alfalah, or any other authorized bank.
• Provide your car’s registration number and chassis number at the counter.
• The bank will provide you with the tax amount, and you can pay it over the counter.

3. Excise and Taxation Office:

You can also visit the Excise and Taxation Office in Islamabad to pay the token tax. Here’s what you need to do:

• Take your car’s original registration book and Computerized National Identity Card (CNIC).
• Approach the Token Tax Counter at the office.
• Pay the tax and collect your receipt. You will be given a sticker for your vehicle’s windscreen to show that the tax is paid for the year.

What Happens if Token Tax is Not Paid?

Failure to pay the token tax on time can lead to various consequences:

1. Fines: A fine may be levied for late payment. The penalty amount depends on how long the payment is overdue.
2. Registration Cancellation: The Excise and Taxation Department has the authority to cancel the vehicle’s registration if the token tax is not paid.
3. Legal Action: In extreme cases, legal actions can be taken against the vehicle owner for not complying with tax regulations.

How to Check Token Tax Status for a Car in Islamabad?

Before buying a car, it’s essential to verify whether the token tax has been paid or not. Here’s how to do it:

• Online Verification: Visit the Excise and Taxation Department’s official website. Use the online tool to verify the token tax status by entering the vehicle’s registration number.
• Mobile Application: The Islamabad Excise Department also has a mobile app where you can check the token tax status, make payments, and access other services.

Documents Required for Token Tax Payment:

For paying the token tax, you will need the following documents:

• Vehicle Registration Book: To confirm that the car is registered with the Excise and Taxation Department.
• CNIC (Computerized National Identity Card): For identity verification.
• Old Token Tax Receipt: If applicable, the previous year’s tax receipt can be helpful for verification.
• Chassis and Engine Number: These may be required for cross-verification of the vehicle’s details.

Conclusion

The Token Tax is an important annual responsibility for every car owner in Islamabad. Ensuring that this tax is paid on time is crucial to avoid penalties and maintain the legal status of the vehicle. Whether you’re buying or selling a car, make sure that the token tax is up to date before completing the transaction. By following this guide, you can easily calculate, pay, and stay compliant with the token tax regulations in Islamabad.