Delhi Government Offers Rs 50,000 Tax Break for Scrapping Old Vehicles

In a bid to promote the retirement of old vehicles, the Delhi government plans to provide a subsidy of up to Rs 50,000 in road tax for new cars with better emission standards.

Transport department officials have crafted a draft policy on scrapping vehicles, which is expected to be shared with the public soon for their input.

The proposed policy is currently under review by the finance department for approval, considering it involves the use of public funds as a subsidy, as reported by TOI.

A senior government official highlighted the issue of numerous vehicles past their lifespan still operating on city roads, contributing to pollution. While the transport department had previously impounded such vehicles for scrapping, the effort was halted due to Delhi High Court intervention.

Following the court’s guidance, the government has formulated a draft policy on vehicle scrapping, with potential varying discounts for commercial and private vehicles.

Under existing regulations, petrol vehicles older than 15 years and diesel vehicles older than 10 years are not allowed to operate in the national capital region.

According to the Statistical Handbook – 2023, around 55 lakh vehicles were deregistered in Delhi in 2021-22 and 2022-23, but only 1.4 lakh were scrapped. Instead, owners obtained a no-objection certificate from the transport department to register 6.3 lakh vehicles outside the NCR.

“This shows that people are still holding on to their aged vehicles, contributing to air quality issues, or parking them in residential areas or lots,” explained an official.

“The new policy aims to motivate people to scrap old, polluting vehicles and invest in new ones,” the official added.

Upon scrapping their vehicles, individuals will receive a “certificate of deposit,” which needs to be submitted with registration papers when purchasing a new vehicle to avail the road tax discount.

This certificate will remain valid for a specific period, and the tax concession will only apply to the same vehicle category being scrapped, according to officials.