
If you own an older car in Maharashtra and plan to keep it for a few more years, the state has a clear message in the 2026-27 budget: it is going to cost more. The Maharashtra government has announced that it will double the green tax on older, more polluting vehicles, while also offering tax concessions to owners who scrap older vehicles and buy new ones.

This matters because green tax is not a one-time “new car” fee. It is a recurring cost linked to keeping older vehicles on the road, and doubling it changes the ownership math for anyone running an ageing petrol or diesel vehicle.
In the budget announcement, the government said it will double the environmental tax, commonly referred to as green tax, on older non-transport vehicles that are BS4 or lower. In plain terms, the target group is private vehicles that are not commercial taxis or goods carriers, and that belong to older emission categories.
The idea is simple: vehicles built to older emission standards usually emit more pollutants than newer ones, even if they are still running “fine” mechanically. By making the tax higher for these vehicles, the state is trying to push owners towards either upgrading to a cleaner vehicle or exiting the older vehicle from the system.

What this is not, at least right now, is an instant road ban. This is a financial lever. You can still own and use the vehicle, but the government wants that choice to feel expensive over time.
This is part of a broader push to clean up the vehicle fleet and discourage older, fuel-inefficient vehicles from staying in circulation for too long. Older emission standards, by design, are less strict than newer ones. BS6 vehicles, for example, came with a major tightening of tailpipe limits compared to BS4 and earlier.
The timing also lines up with a bigger national shift towards scrappage policies, where governments try to move owners away from keeping very old vehicles indefinitely by combining incentives and penalties. Maharashtra’s budget approach does exactly that: it raises the “cost to keep” older vehicles through green tax, and simultaneously reduces the “cost to switch” by offering tax concessions if you scrap an old vehicle and buy a new one.

Alongside the doubled green tax, the state budget also offered tax breaks for people who scrap old vehicles before buying a new one. The benefits are tiered based on how old and polluting the scrapped vehicle is.
If you scrap a BS4 or higher vehicle, the state announced a 16 percent concession on the motor vehicle tax for the new vehicle you buy.
If you scrap a BS3 or older vehicle, the announced concession is higher at 30 percent on the motor vehicle tax for your new vehicle.
This structure is important because it clearly tries to remove the dirtiest vehicles first. Scrapping a BS3 or older vehicle gives you a bigger reward, which makes sense if the policy goal is cleaner air faster.
For buyers, this becomes a straightforward calculation: if your current vehicle is old enough to fall into the higher-green-tax bucket, the state is nudging you to scrap it and use the concession to reduce your upfront tax on the replacement vehicle.
If you are affected, the practical next steps are about paperwork and timing, not panic.
First, check your car’s emission standard and registration details. Many owners know the model year but not whether the vehicle is BS3 or BS4. That difference now matters for both the green tax side and the scrappage concession side.
Second, if you are considering replacement, ensure scrappage is done through the proper channel so you can actually claim the concession. Tax benefits usually hinge on proof, and scrappage schemes typically require an official certificate from an authorised facility.
Third, remember that this is a budget announcement and the exact on-ground rollout depends on notification and implementation. But directionally, the policy is clear: running older BS4 and below private vehicles in Maharashtra is set to become more expensive, and the state wants you to exit older vehicles through scrappage rather than keep renewing them indefinitely.