Maharashtra: Owning old cars becomes burden as govt spikes Green Tax

Mumbai: The Maharashtra government has taken a major decision for vehicle owners in the 2026-27 budget. The government has taken this step to reduce pollution in the state. The government has taken two major steps in the budget. First, the green tax has been increased on old and highly polluting vehicles. Secondly, those who scrap their old vehicles and purchase new ones will receive special tax exemptions.

The government says this step is necessary to reduce rising pollution in cities. A large number of old vehicles are still plying on the roads, contributing to rising pollution levels. Presenting the budget, the Maharashtra Chief Minister stated that this decision will not only reduce pollution but also benefit the auto sector.

What is Green tax on old vehicles?

The biggest decision in the budget is that the green tax on certain old vehicles will be doubled. This tax increase is specifically proposed for private vehicles with BS-4 emission norms or older. The government says that such vehicles emit excessive smoke and pollution, so it is important to reduce their use.

Has the Maharashtra government given relief on Green Tax?

While the government has increased taxes, it has also provided relief to vehicle owners. If a person scraps their old vehicle and buys a new one, they will receive a motor vehicle tax exemption. According to the government's proposal, scrapping a BS-4 or higher vehicle can provide a tax exemption of up to 16% on the new vehicle. Scrapping a BS-3 or older vehicle can provide a tax exemption of up to 30%. This exemption is specifically being offered to encourage, or rather support, people to discard their old vehicles and purchase new ones.

The government's aim is to reduce pollution in the state. Older vehicles emit more smoke and consume more fuel than newer vehicles. This is causing air pollution in cities. The government wants people to purchase vehicles with new technology, which will reduce pollution and improve road safety. Additionally, sales of new vehicles in the auto sector are expected to increase.

What will be the impact on vehicle owners?

This decision will have two impacts. First, those who own older vehicles may have to pay higher taxes. This could increase their maintenance and operating costs. Second, those considering purchasing a new vehicle may benefit. They can receive significant tax breaks if they scrap their old vehicle.