Maharashtra Increases Green Tax on Older Vehicles, Offers Scrapping Benefits

The Maharashtra government has announced a significant increase in the green tax imposed on older vehicles, with rates set to rise as high as Rs 7,000 depending on vehicle categories. This initiative, presented by Chief Minister Devendra Fadnavis during the 2026 state budget announcement, aims to target vehicles adhering to BS4 emission norms or older standards. Alongside this increase, the government is also proposing tax concessions for owners who opt to scrap their aging vehicles in favor of new models.

Details of the Green Tax Increase

Under the new proposal, the green tax will rise significantly across three primary categories: two-wheelers, petrol light motor vehicles (LMVs), and diesel light motor vehicles. Specifically, the green tax for two-wheelers will increase from Rs 2,000 to Rs 4,000. For petrol light motor vehicles, the tax will rise from Rs 3,000 to Rs 6,000, while diesel light motor vehicles will see the most substantial increase, escalating from Rs 3,500 to Rs 7,000.

Currently, Maharashtra imposes a green tax on vehicles that are more than 15 years old. If the proposal is enacted, officials have indicated that enforcement measures may become stricter. This could include regular checks to ensure vehicle owners have paid the green tax and possess valid fitness certificates.

Tax Concessions for Vehicle Owners

In a bid to encourage vehicle owners to replace their older models, the Maharashtra government is also offering tax concessions for those who choose to scrap their old vehicles. Owners who scrap a vehicle that meets BS4 or newer standards will receive a 16 percent concession on their motor vehicle tax when purchasing a new vehicle. For those scrapping vehicles classified as BS3 or older, the tax concession will be even more beneficial, reaching up to 30 percent.

This initiative is part of a broader strategy to promote environmental sustainability and modernize the vehicle fleet in Maharashtra. The government anticipates that these measures will motivate many owners to invest in newer, cleaner vehicles, thereby contributing to improved air quality and reduced emissions across the state.

The Maharashtra government’s approach reflects a growing trend among local governments to implement measures aimed at reducing vehicular pollution while encouraging the adoption of environmentally friendly technologies. With these proposed changes, the state aims to foster a cleaner and more sustainable transportation landscape.