Monday, February 23, 2026
By Kamal Swami
No More Cash Payments On Toll Plazas From April 1, 2026
To smooth the movement on national and state highways, the National Highway Authority of India (NHAI) plans to make the payment at toll plazas cashless. India’s expanding network of national highways and expressways now includes over 1,150 functional toll plazas. At present, people moving across the toll plazas without sufficient FASTag balance pay toll charges in cash or via digital payment apps. As per the proposed changes, toll plazas will not accept payment in cash in case of insufficient balance. Such commuters will be required to make the payment either through UPI-powered payment apps or digital wallets.
The main objective of this step is to strengthen India’s Electronic Toll Collection programme and create a seamless, fully digital tolling ecosystem. Most vehicles today use RFID-based FASTags that automatically deduct toll charges as they pass through plazas, ensuring contactless and efficient transactions. Although the facility to pay toll charges through UPI apps is also available at most toll booths, commuters still prefer cash.
Tackling Congestion at Toll Plazas
According to NHAI officials, payment in cash at toll plazas often results in congestion and long queues. Small issues such as waiting for change, like paying Rs 100 for a Rs 90 toll, delay the transaction, slow lane movement, and even lead to disputes. A complete transition to digital payments is expected to significantly improve lane throughput and reduce congestion. Faster processing through FASTag or UPI will ensure smoother movement of traffic, provided payment systems function without technical glitches.
Revised Penalty Structure Encourages Digital Payments
Under current rules, vehicles without a valid FASTag or with insufficient balance have to pay double toll if they make the payment in cash. On the other hand, paying the toll tax through UPI attracts only 1.25 times the regular toll fee.
For instance, if a toll amount is Rs 45, a commuter paying cash will have to pay Rs 90, while a UPI payment would amount to Rs 56. This structure already encourages digital transactions and could further benefit road users if the proposed cash ban is implemented. By removing the option of paying the toll charges in cash , penalties linked to cash payments would effectively become irrelevant.
Minimal Impact Due to High FASTag Adoption
It is believed that the implementation of the new toll laws will not significantly affect the vehicle owners across the country, due to the increasing use of FASTag. However, commuters will need to ensure that there is sufficient balance in their FASTag accounts. The proposed ban is a part of India’s broader move towards digitisation in travel and infrastructure systems. If executed efficiently, it could streamline toll operations, improve traffic management and the overall highway travel experience.
No need for KYV for FASTag
Taking an important step in encouraging the FASTag adoption, NHAI has recently removed the mandatory Know Your Vehicle (KYV) requirement for FASTag issuance in the Car/Jeep/Van category. As part of a new initiative, banks will now be solely responsible for verifying vehicle details at the time of activation. The new rule, effective from February 1, 2026, eliminates post-issuance KYV checks, simplifying the FASTag application process. The move is expected to further boost FASTag adoption and make digital toll payments more accessible for vehicle owners. While the proposal to eliminate cash payments is yet to receive final approval, it signals a clear direction towards a completely cashless tolling future in India.
