With an ever expanding human population the number of vehicles on road is also increasing. The traditional natured traffic management system and limited road lengths available, it's time that some improvisation and thought is laid upon on this subject as well. The evolution of Information Technology era is leading to the Internet of Things (IoT) and accordingly there are several technologies that have come into existence like Vehicular Ad-hoc Network (VANET). In this paper an innovative idea for traffic management system using radio frequency identification (RFID) tags and RFID Reader is described which has the ability to monitor and manage traffic as well as can be used to detect the collisions. It also introduces a Smart city framework and explains the storage of vehicle history and information related, automated traffic violation monitoring, and automated fine/challan delivery. It also describes how RFID tracker applications for mobile and computers can be modified by software upgrades and create real time monitoring systems. Resulting system would be far cheaper and reliable than the current CCTV camera based system and it could be used as a platform for various other applications. © 2016 ACM.