Maharashtra proposes double green tax on older vehicles

The Maharashtra government has proposed a 100 percent increase in the environmental (green) tax on older private vehicles as part of a broader push to reduce pollution and modernise the state’s vehicle fleet. Presenting the 2026 Maharashtra budget, chief minister Devendra Fadnavis said the measure targets ageing vehicles with BS4 and older emission standards. However, the government will offer tax concessions to owners who have their old vehicles scrapped.

1. Green tax to be increased for two-wheelers, petrol cars and diesel cars
2. Stricter checking of green tax payment and fitness certificates for old vehicles
3. Up to 30 percent motor vehicle tax reduction for old vehicle owners who elect to scrap

Green tax increase for old vehicles in Maharashtra explained

Tax hike up to Rs 7,000, depending on category

Under the proposal, green tax rates will be hiked across three categories: two-wheelers, petrol light motor vehicles and diesel light motor vehicles. For two-wheelers, the green tax will jump from the current Rs 2,000 to Rs 4,000. Petrol LMV green tax will increase from Rs 3,000 to Rs 6,000, while the same for diesel LMVs will be bumped from Rs 3,500 to Rs 7,000.

Maharashtra already levies a green tax on vehicles older than 15 years. Officials also indicated that enforcement will be tightened, including checks to ensure payment of green tax and valid fitness certificates.

Concessions for owners who elect to scrap their old cars

Alongside the tax increase, the state government has proposed incentives to encourage owners to scrap old vehicles and replace them with newer models. Buyers who scrap an existing vehicle and purchase a new one will receive concessions in motor vehicle tax.

Specifically, those who scrap vehicles compliant with BS4 or higher emission norms will get a 16 percent tax concession when buying a new vehicle. This benefit will rise to 30 percent for owners who elect to scrap BS3 or older vehicles.

“These steps are intended to discourage the use of fuel-inefficient and polluting vehicles, accelerate fleet modernisation and improve air quality in the state,” Fadnavis said in his budget speech.