Maharashtra Budget Doubles Green Tax On Older Vehicles, Tax Breaks For Scrapping

The Maharashtra government has introduced measures in its 2026-27 budget to promote cleaner roads. The move by the government incentivises the scrapping of old vehicles with a proposal to increase environmental tax (green tax) to 100 per cent for older private vehicles. Presented by Chief Minister Devendra Fadnavis, these steps aim to modernise the vehicles and tackle rising air pollution in urban areas.

Owners scrapping older vehicles and buying new ones stand to gain significant motor vehicle tax concessions. For those replacing BS-4 or higher emission-compliant vehicles, a 16 per cent rebate applies on the new vehicle's tax. The incentive jumps to 30 per cent for scrapping BS-3 or older models, encouraging faster phase-out of dirtier engines. Fadnavis highlighted that this will reduce reliance on fuel-inefficient machines and boost air quality across the state.

Also Read: Jeep Wagoneer S Electric SUV Design Patented In India; Offers 473 Km Range

At the same time, the environmental tax on non-transport private vehicles with BS-4 and below norms will double, targeting their outsized pollution impact. Specific hikes include two-wheelers from Rs 2,000 to Rs 4,000, petrol light motor vehicles from Rs 3,000 to Rs 6,000, and diesel variants from Rs 3,500 to Rs 7,000 annually. Petrol and diesel light motor vehicles remain taxable, with stricter enforcement on fitness certificates expected.

Also Read: Mahindra XUV 7XO Women's Edition Teased Ahead Of Launch

Additional provisions cap motor vehicle tax on crane-mounted vehicles at Rs 30 lakh, easing burdens for commercial operators. These policies build on earlier scrappage rules mandatory for government vehicles over 15 years old, now extended to private owners. Maharashtra seeks to accelerate the shift to efficient, low-emission transport amid growing urban congestion.

Experts believe the dual approach could spur sales of BS-6 compliant cars and two-wheelers while pressuring owners of legacy fleets to upgrade. Implementation details will follow cabinet approval, but the budget signals a firm commitment to sustainable mobility.