The problem of managing smart toll lanes is one of the crucial topics of researchers and transportation industry. This paper provides an insight to various strategies involved in smart toll collection system (STCS). One of the most widely used techniques for STCS is the Radio frequency identification (RFID) technique. A small prototype hardware realizationof STCS is delineated to make the basics discernible. This paper describes the toll collection system based on distance travelled by the vehicle using RFID technology. The vehicle will hold a unique identification number assigned to the vehicle by traffic governing authority. All basic information as well as prepaid account details to ensure payment against toll tax incurred, is stored in the data base of the STCS. The unique tag number is read by the RFID reader at both entry and exit of the toll road and gate number will be stored in database. At the time of exit the distance will be calculated by the micro- controller. The billing amount is then displayed, balance is deducted from the prepaid balance and new balance is updated. This paper is a short communication to enable a novice to decipher the details involved in STCS in a facile manner.