The study of this paper presents a new technique to use automatic number plate detection and recognition. This system plays a significant role throughout this busy world, owing to rise in use of vehicles day-by-day. Some of the applications of this software are automatic toll tax collection, unmanned parking slots, safety and security. The current scenario happening in India is, people break the rules of the toll and move away which can cause many serious issues like accidents. This system uses efficient algorithms to detect the vehicle number from real time images. The system detects the license plate on the vehicle first and then captures the image of it. Vehicle number plate is localized and characters are segmented and further recognized with help of neural network. The system is designed for grey scale images so it detects the number plate regardless of its colour. The resulting vehicle number plate is then compared with the available database of all vehicles which have been already registered by the users so as to come up with information about vehicle type and charge accordingly. The vehicle information such as date, toll amount is stored in the database to maintain the record.