The automated toll collection system using passive Radio Frequency Identification (RFID) tag emerges as a convincing solution to the manual toll collection method employed at tollgates. Time and efficiency are a matter of priority of present day. In order to overcome the major issues of vehicle congestion and time consumption RFID technology is used. RFID reader fixed at tollgate frame (or even a hand held reader at manual lane, in case RFID tagged vehicle enters manual toll paying lane) reads the tag attached to windshield of vehicle. The object detection sensor in the reader detects the approach of the incoming vehicle’s tag and toll deduction takes place through a prepaid card assigned to the concerned RFID tag that belongs to the owners’ account. This makes tollgate transaction more convenient for the public use.