Maharashtra to double environmental tax on older cars

The Maharashtra government has proposed tax incentives for motorists who scrap older vehicles and purchase new ones, while also planning to increase environmental tax on certain ageing private vehicles.

Presenting the state Budget for 2026–27 in the assembly on Friday, Chief Minister Devendra Fadnavis said the measures are aimed at reducing the number of older, more polluting vehicles on the road and improving air quality across the state.

Scrapping an old vehicle could now mean a tax break

Under the proposal, buyers who scrap an existing vehicle and replace it with a new one will receive a concession on motor vehicle tax. A 16 per cent tax concession is proposed for those scrapping vehicles compliant with BS-4 or newer emission standards. A higher concession of 30 per cent is proposed for those scrapping vehicles that meet BS-3 or older emission norms and purchasing a new vehicle.

Environmental tax on older private vehicles set to rise

At the same time, the government plans to increase the environmental tax on older private vehicles.

According to Fadnavis, non-transport vehicles with BS-4 and earlier emission standards contribute significantly to air pollution. To address this, the Budget proposes doubling the environmental tax applicable to such vehicles.

The government has also proposed a cap on motor vehicle tax for crane-mounted vehicles. Under the proposal, the tax payable on these vehicles will be limited to a maximum of ₹30 lakh.

The state government said the changes are part of a broader effort to encourage the replacement of older vehicles with newer, cleaner models and reduce pollution levels.

(With inputs from PTI)

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.