This document proposes a smart toll and penalty collection system using QR codes. Currently, toll collection faces problems like long queues and traffic jams. The proposed system generates a unique QR code for each registered vehicle containing owner and vehicle details. Toll collectors can then quickly scan the QR code to automatically identify the vehicle and deduct toll fees. The system can also identify if a vehicle is stolen by checking a stolen vehicle database. The system further proposes that traffic police can scan QR codes using their mobile phones to easily collect penalties without additional hardware. This integrated system aims to make toll collection and penalty collection more efficient and reduce delays.