Abstract: This Paper proposes a approach for the toll Collection at toll booths which is automatized using RFID & GSM technology in order to reduce the time consumption. RFID Tag will be held in each Vehicle which contains unique identification number assigned. The identification is done with the help of radio frequency. RFID Tag will be held in each Vehicle which contains unique identification number assigned. All basic information & the amount that has been paid in advance will be stored in accordance with the number. The RTO or traffic governing authority will do the assigning process & the reader will be strategically placed at toll collection center. The tax amount will be deducted from the prepaid balance, whenever the vehicle passes the toll booth and the new balance will be updated. SMS messages is sent to the mobile owner regarding the balance information.As vehicles don’t have to stop in a queue, this translates to reduced Traffic congestion at toll plazas and helps in lower fuel consumption. This is very important advantage of this system.