Tax structure explained: Delhi govt offers rebate for scrapping old cars

The government is offering a rebate on motor vehicle tax for buyers who scrap their old vehicles and purchase new ones within three years. T

The Delhi government has announced a new incentive scheme to promote the scrapping of old vehicles. Under this scheme, buyers of new vehicles who opt to scrap their old ones will be eligible for a tax rebate of 10-20%.

"The government will incentivise those who opt for the scrapping of their old vehicles, through rebate in motor-vehicle tax on buying new vehicles within three years," said the Delhi government statement. By offering a higher rebate for cleaner fuel options like CNG and petrol, the government is promoting a shift towards less polluting vehicles.

Key Points:

• Tax Rebate: The rebate will be applicable on the purchase of new vehicles.
• Old Vehicle Scrapping: Buyers must scrap their old vehicles to qualify for the rebate.
• Notification: The scheme will be formally notified soon.

Tax Rebate Structure:

 

The rebate amount varies depending on the type of new vehicle you purchase:

• 20% Rebate: Applies to non-commercial CNG (Compressed Natural Gas) and petrol vehicles.
• 15% Rebate: Applies to commercial CNG and petrol vehicles.
• 10% Rebate: Applies to diesel vehicle

The policy is aimed at removing old and polluting vehicles on the road by promoting the use of less-polluting ones having upgraded emission standards, it said.

To avail of the discount under the scheme, one must obtain a Certificate of Deposit while scrapping their old vehicle at a registered scrapping facility, and this document must be submitted during the registration of new commercial and non-commercial vehicles within three years from the date of issue to avail discounts on Motor Vehicle Tax.

Benefits:

• Reduced Pollution: Scrapping old vehicles can help reduce pollution and improve air quality.
• Economic Stimulus: The scheme can stimulate the demand for new vehicles, benefiting the automotive industry.
• Financial Incentive: The tax rebate provides a financial incentive for consumers to upgrade their vehicles.

The Delhi government's initiative is a step towards promoting sustainable transportation and reducing pollution in the city. The tax rebate can encourage individuals to replace their old vehicles with newer, more fuel-efficient models.

According to the Delhi government, the scheme is expected not only to provide much-needed relief to consumers amidst inflation but also to reduce the number of old polluting vehicles on the road.