SpotGenie Gyaan: Green Tax in India (2025), What Every Vehicle Owner Should Know

Your 15-year-old car is due for renewal and suddenly you hear:

“Sir, Green Tax bhi lagta hai.”

And you wonder: What tax? Why now? How much? Is it mandatory?

India’s Green Tax is no longer a future plan, it’s firmly active in 2025 across most states.

If you're renewing an older vehicle, this is one rule you cannot afford to ignore.

This SpotGenie Gyaan blog breaks down everything simply :

• Who needs to pay Green Tax
• How much it costs
• Which vehicles are exempt
• BS6 vs older engines
• Why some states charge more
• Connection with scrappage & fitness rules
• What you should do right now

Let’s get into it.

1. What Is Green Tax, In Simple Words?

Green Tax is an environmental tax charged on older, more polluting vehicles when they renew their registration or fitness certificate.

It is not a replacement for road tax.

It is an additional tax , meant to:

• Discourage old vehicles from staying on roads
• Reduce urban air pollution
• Push owners toward cleaner vehicles (hybrid, CNG, EV, BS6)

Introduced by the Ministry of Road Transport & Highways (MoRTH), it is now implemented by most Indian states as of 2025 .

2. When Does Green Tax Apply?

A. Private Vehicles

• At 15 years old → during renewal
• Charged at every subsequent renewal cycle (5 years)

B. Commercial Vehicles

• After 8–10 years of life
• Green Tax applies during every fitness test renewal (every 2 years)

C. Diesel Vehicles

• Stricter in many states
• Delhi NCR does not allow renewal of diesel vehicles beyond 10 years

D. High-Pollution Zones

Areas with high pollution load apply higher Green Tax :

• Delhi NCR
• Mumbai–Thane
• Bengaluru
• Hyderabad
• Chennai
• Kolkata

3. How Much Is the Green Tax in 2025?

Green Tax varies by state, but there is a general structure.

Private Vehicles (Petrol)

• 10–25% of annual road tax

Private Vehicles (Diesel)

• 15–50% of annual road tax (higher due to emissions)

Commercial Vehicles

• 2.5–10% of lifetime tax
• Or a fixed surcharge (depending on state)

Transport Vehicles (Trucks/Buses)

• Higher slab due to pollution contribution
• Often ₹4,000–₹10,000 per year

Auto Rickshaws

• Generally ₹1,000–₹2,000 per year

Two-Wheelers

• Much lower but still applicable in many states
• ₹200–₹600 at renewal

Luxury Diesel Cars and SUVs

• Higher slabs in metro cities
• 100% penalty in certain zones (e.g., Delhi NCR enforcement)

4. Who Is Exempt from Green Tax?

The following vehicles do NOT pay Green Tax :

• Electric vehicles (EVs)
• Hybrid vehicles (HEVs)
• Vehicles running on CNG / LNG / LPG
• BS6-compliant vehicles (for now)
• Tractors and farm vehicles
• Vintage and classic cars (certified by Parivahan)
• Vehicles used for essential services :
• Fire trucks
• Ambulances
• Municipal vehicles
• Police & defence vehicles

5. Why Is India Collecting Green Tax?

There’s a clear logic behind it:

1. Older vehicles pollute more

A 20-year-old car can emit up to 10x more pollutants than a BS6 vehicle.

2. Cities are choking

Metro cities consistently rank high on PM2.5 pollution.

3. India wants to accelerate EV adoption

Taxing old polluting vehicles pushes buyers toward cleaner choices.

4. Circular economy push

Green Tax works alongside the Scrappage Policy to remove ELVs.

6. State-Wise Trends in 2025

Delhi NCR

• Diesel vehicles banned after 10 years
• No renewal allowed → must be scrapped
• Petrol allowed for 15 years + 5-year renewals with Green Tax

Maharashtra

• Green Tax implemented across major cities
• Heavier penalties for diesel

Karnataka

• Automated fitness test enforcement increasing
• Green Tax added during renewal

Uttar Pradesh

• Aggressive EV push → lower green tax for CNG vehicles

Tamil Nadu

• Structured slabs for commercial vehicles

Gujarat

• Lower slabs due to high manufacturing participation

7. How Green Tax + Scrappage Policy Are Connected

Green Tax is basically the “economic nudge” for owners to let go of very old vehicles.

Green Tax = discourages keeping old vehicles

Scrappage Policy = rewards replacing them

Together, they encourage:

• Cleaner roads
• Lower pollution
• Safer vehicles
• More fuel-efficient mobility
• Better recycling ecosystem

8. SpotGenie

Green Tax is not a penalty, it’s a push towards responsibility .

With millions of older vehicles still on the road, this policy improves:

• Road safety
• Emissions
• Traffic conditions
• Public health

At SpotGenie, we believe awareness is the strongest way to change behaviour.

Knowing your renewal rules prevents surprises, and helps you make smarter decisions for your vehicle’s future.

🔗 Other SpotGenie Reads You’ll Like

India’s Vehicle Scrappage Policy Explained
Brand Origins, The Stories Behind the Badges That Move India
Know Your Car
How Legal Self-Drive Businesses Operate
ADAS Levels Explained for Indian Cars
India’s Festive Auto Sales 2025
Mumbai–Ahmedabad Bullet Train Progress 2025

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