Maharashtra Assembly Passes Motor Vehicles Tax Amendment Bill, 2026, Doubling Green Levy

(MAHARASHTRA, INDIA) — The Maharashtra Legislative Assembly unanimously passed the Maharashtra Motor Vehicles Tax (Amendment) Bill, 2026, on Wednesday, doubling the environmental (green) tax on vehicles older than 15 years with BS4 and earlier emission standards to curb pollution and modernize the vehicle fleet.

Transport Minister Pratap Sarnaik presented the bill, which revises the tax structure for ageing private, non-transport vehicles as a one-time payment valid for five years.

The measure raises the green levy by 100% across categories. Two-wheelers will pay ₹4,000, up from ₹2,000. Petrol light motor vehicles will pay ₹6,000, up from ₹3,000, while diesel light motor vehicles will pay ₹7,000, up from ₹3,500.

Lawmakers also approved stricter enforcement tied to older vehicles. The bill provides for enhanced checks on green tax payments and fitness certificates for vehicles over 15 years.

The Maharashtra Motor Vehicles Tax (Amendment) Bill, 2026 comes as the state pushes to phase out older, fuel-inefficient vehicles and shift toward a newer fleet. The changes target vehicles with BS4 and earlier emission standards.

Chief Minister Devendra Fadnavis announced the measures in the Maharashtra Budget 2026 speech. He linked the proposal to air quality and fleet renewal.

“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 stated.

Beyond the higher green levy, the bill adds concessions aimed at scrappage and replacement. Buyers who scrap BS4 or higher norm vehicles will get a 16% concession on motor vehicle tax on new vehicle purchases.

Owners who scrap BS3 or older vehicles will get a 30% concession. The state has pitched those incentives as a way to encourage fleet modernization and push newer BS-VI compliant and electric vehicles.

The tax changes cover ageing private vehicles and apply as a one-time payment structure valid for five years. That framework keeps the levy tied to a fixed period rather than an annual collection for the categories described in the bill.

The Assembly’s decision builds on an existing policy structure rather than creating a green tax from scratch. Maharashtra has already levied green tax on vehicles over 15 years.

Earlier policy moves approved in October 2022 had mandated scrapping for government vehicles over 15 years. That framework was also extended to private cars over 20 years.

The 2026 amendments widen that approach through higher rates, tighter checks and fresh incentives. In doing so, the state has combined a penalty on ageing vehicles with tax relief for owners who move to newer ones.

Revenue is central to the plan as well. The bill is expected to generate over ₹160 crore in additional annual revenue.

That money is to be directed toward road safety, modern transport infrastructure, Automated Testing Stations (ATS), and training. The government has presented that spending plan as a way to strengthen the transport system while funding enforcement and testing needs.

The proposal also reflects a fiscal argument made alongside the environmental one. The bill promotes BS-VI compliant and electric vehicles without burdening the state’s consolidated fund.

For motorists, the biggest immediate effect is the revised green levy. A two-wheeler owner with a vehicle older than 15 years and within the affected emission standards will now face a ₹4,000 payment for five years instead of ₹2,000.

For petrol light motor vehicles, the levy doubles to ₹6,000 from ₹3,000. Diesel light motor vehicles face the highest revised amount among the listed categories at ₹7,000, up from ₹3,500.

Those increases are uniform in percentage terms. Each category carries a 100% hike.

The state has paired those higher charges with closer scrutiny of compliance. Vehicles over 15 years will face enhanced checks on whether green tax has been paid and whether the required fitness certificate is in place.

That enforcement element matters because the bill does more than alter rates. It links the higher levy to compliance monitoring for vehicles that remain on the road after crossing the 15-year mark.

The scrappage concessions offer the other side of the policy. Owners who replace older vehicles after scrapping them can reduce the motor vehicle tax on a new purchase, with the relief tied to the emission standard of the scrapped vehicle.

A BS4 or higher norm vehicle qualifies for a 16% concession. A BS3 or older vehicle qualifies for a 30% concession.

That structure gives the larger concession to the older and more polluting bracket identified in the bill. It also aligns with the stated goal of moving owners away from older technology and toward cleaner models.

Fadnavis framed the broader effort around three linked aims in the budget: reducing fuel-inefficient and polluting vehicles, improving air quality, and accelerating fleet modernization. The tax rise, the tighter checks and the concessions all sit within that framework.

The use of the term green levy reflects that environmental focus. In practice, the bill ties the levy to vehicle age and emission norms, targeting vehicles older than 15 years with BS4 and earlier standards.

Sarnaik’s presentation of the bill in the Assembly put the transport department at the center of the rollout. The policy touches tax collection, compliance checks, vehicle fitness and replacement incentives, which together shape how older vehicles are regulated.

Automated Testing Stations stand to be one of the beneficiaries of the added revenue. The bill says the additional annual collections will support ATS along with road safety, modern transport infrastructure and training.

That spending plan connects the tax change with the machinery needed to examine ageing vehicles. Fitness certificate enforcement, in particular, fits with the emphasis on testing and oversight for vehicles that remain in use after 15 years.

The policy evolution since October 2022 shows a steady tightening. Maharashtra first used scrapping rules for government vehicles over 15 years, then extended that approach to private cars over 20 years, and has now expanded enforcement and incentives through the 2026 amendments.

By retaining the existing principle of green tax on vehicles over 15 years and raising rates sharply, the Assembly has moved the state toward a stronger cost signal against keeping older vehicles on the road. The concessions, meanwhile, offer a route into replacement rather than retention.

The bill’s focus on BS-VI compliant and electric vehicles points to where the state wants the fleet to move. Rather than relying on the state’s consolidated fund, the measure uses the tax changes to generate over ₹160 crore for transport and safety spending while encouraging owners to scrap older vehicles and switch to cleaner ones.

With the Assembly’s unanimous passage now secured, Maharashtra has put a higher price on older vehicles that continue to operate under BS4 and earlier standards, while offering a larger tax break to those who scrap BS3 or older vehicles and move to newer ones.