India's Vehicle Scrappage Policy is quietly reshaping what it costs to own an old car. The headline number doing the rounds is a 50% road tax rebate, but it is important to be precise: that figure is a proposal placed by the Ministry of Road Transport and Highways (MoRTH) on 24 January 2025, not active law. What is actually enacted today is a one-time road tax concession of up to 25% on a new private vehicle and up to 15% on a new commercial vehicle when you buy after scrapping an old one. Layered on top of that are an instant scrap value of roughly 4% to 6% of a model's ex-showroom price and a waiver of the new vehicle's registration fee. With more than 129 Registered Vehicle Scrapping Facilities now operational across 21 states and nearly 4 Lakh vehicles already scrapped through December 2025, the policy has shifted from a purely voluntary scheme toward one that is increasingly enforced through economics. This guide separates what is live from what is proposed, lays out the rupee math, and explains what it all means for owners of old cars and for used car buyers.
What Is Live Today vs What MoRTH Has Proposed
The single most misreported part of the scrappage story is the 50% figure. To use the policy correctly, you need to keep two timelines apart: what is currently notified and available, and what has only been proposed.
Currently in force. When you scrap an old vehicle at a Registered Vehicle Scrapping Facility (RVSF) and obtain a Certificate of Deposit, you become eligible for a one-time road tax concession on your next vehicle purchase. For a new private (non-transport) vehicle, this concession is up to 25%. For a new commercial (transport) vehicle, it is up to 15%. The concession is applied when you register the new vehicle, and the exact percentage and the period for which it applies are set by your state, because road tax is a state subject under the Constitution.
Proposed, not yet enacted. On 24 January 2025, MoRTH proposed increasing the one-time tax rebate to up to 50% for buyers who purchase a new vehicle after scrapping an older vehicle compliant with BS-II emission norms or earlier, which broadly means vehicles registered before 2002. This is a proposal under consideration. Until it is formally notified and adopted by states, the benefit available to a buyer remains the up-to-25% private and up-to-15% commercial concession. Anyone planning a purchase around the 50% number should treat it as a possible future enhancement, not a benefit they can claim today.
Read the 50% as a proposal, not a promise. The up-to-50% rebate is a MoRTH proposal dated 24 January 2025 targeted at BS-II-or-older (broadly pre-2002) vehicles. It has not been enacted into law and is not currently available at any RTO. Do not time a car purchase assuming the 50% concession is live. The benefit you can actually claim right now is up to 25% (private) or up to 15% (commercial), and even that varies by state notification.
Current vs Proposed Rebate: Private and Commercial
The table below puts the live concession alongside the MoRTH proposal so the difference is unambiguous. The proposed column is shaded in your reading by the word "proposed" deliberately, because it is not something you can rely on yet.
| Vehicle Type | Current Rebate (Live) | MoRTH Proposal (Not Enacted) | Eligibility Note |
|---|---|---|---|
| Private / non-transport | Up to 25% road tax concession | Up to 50% (proposed) | On new vehicle bought after scrapping |
| Commercial / transport | Up to 15% road tax concession | Up to 50% (proposed) | On new vehicle bought after scrapping |
| Proposal target vehicles | Any scrapped vehicle (state rules) | BS-II or older, broadly pre-2002 | Proposal scoped to older emission norms |
| Registration fee on new vehicle | Waived once deposit certificate declared | Continues under proposal | Separate from the tax concession |
The other point the table makes clear is that the concession is one-time and applies to the new vehicle you buy after scrapping. It is not a refund on the old vehicle's already-paid road tax. The benefit is delivered at the registration stage of the replacement vehicle, which is why the Certificate of Deposit from the RVSF is the document that unlocks everything downstream. For broader context on how the scrappage rollout has tracked against its own targets, our earlier coverage in India's scrappage policy and the fitness-test bottleneck is a useful companion read.
The Three Benefits: Scrap Value, Registration Waiver, Tax Concession
When people ask "what do I get for scrapping my car", the answer has three separate components that stack. Understanding them individually prevents the common mistake of conflating the small instant payout with the larger downstream concession.
| Benefit | What It Is | Indicative Value | When You Receive It |
|---|---|---|---|
| Scrap value | Cash for the old vehicle at the RVSF | ~4% to 6% of ex-showroom price of the model | Instant, at the time of scrapping |
| Registration fee waiver | New vehicle registration fee waived | Full registration fee on the new car | Once Certificate of Deposit is declared |
| Road tax concession | One-time concession on new vehicle | Up to 25% private / 15% commercial (live) | At registration of the new vehicle |
| Manufacturer discount (optional) | OEM-led incentive on new purchase | Varies by brand and model | At point of new purchase, where offered |
Take a worked example. Suppose you scrap an old hatchback whose model carried an ex-showroom price of around Rs 5 Lakh when new. At a 4% to 6% scrap rate, the RVSF would pay you roughly Rs 20,000 to Rs 30,000 in instant cash for the vehicle. That alone is modest. The larger value sits downstream: when you buy your next car and produce the Certificate of Deposit, the registration fee on the new car is waived, and you receive the road tax concession of up to 25% (for a private vehicle) on that new purchase. On a new car attracting, say, Rs 60,000 in road tax, a 25% concession is Rs 15,000. Added to the registration waiver and any manufacturer scrappage discount, the combined benefit can comfortably exceed the standalone scrap value several times over.
State implementation varies. Road tax is levied by states, so the precise concession percentage, the period it applies for, and the documentation required differ from one state to the next. The figures here are the national framework ceilings (up to 25% private, up to 15% commercial). Always confirm the exact concession notified by your own state transport department before assuming a specific rupee benefit.
The Scrapping Process, Step by Step
Scrapping a vehicle the right way is what makes you eligible for the benefits. Handing the car to an unregistered local scrap dealer destroys the vehicle but gives you no valid Certificate of Deposit, so you forfeit the concession. Here is the correct sequence.
| Step | Action | Why It Matters |
|---|---|---|
| 1. Locate an RVSF | Find a Registered Vehicle Scrapping Facility (129+ across 21 states) | Only an RVSF can legally dismantle and issue the deposit certificate |
| 2. Submit documents | Provide RC, owner ID and clear any dues or liens | Active hypothecation or pending challans can block scrapping |
| 3. Vehicle scrapped | Vehicle is dismantled and depolluted at the facility | The old registration is cancelled on the government portal |
| 4. Receive scrap value | Get ~4% to 6% of ex-showroom price as instant cash | Immediate payout for the vehicle |
| 5. Certificate of Deposit | RVSF issues the Certificate of Deposit (deposit certificate) | This document unlocks the tax concession and reg-fee waiver |
| 6. Buy and register new vehicle | Declare the deposit certificate at registration | Reg fee waived, road tax concession applied to the new vehicle |
The critical document throughout is the Certificate of Deposit. It is generated only by a registered facility and is recorded on the official portal, which is how the RTO later validates your concession claim on the new vehicle. Before you take a vehicle anywhere, clear any outstanding loan, lien or pending challan, because an unresolved encumbrance can stall the scrapping itself.
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The Network: 129+ RVSFs and a Shift From Voluntary to Enforced
The infrastructure that makes the policy real has expanded meaningfully. As of the latest data, more than 129 Registered Vehicle Scrapping Facilities are operational across 21 states, and nearly 4 Lakh vehicles had been scrapped through December 2025. That cumulative number reflects a policy that is gathering pace rather than stalling, even though the rollout has not been uniform across every region.
What is changing in character is the underlying compulsion. The scheme began as a voluntary one, encouraging owners of old vehicles to scrap them in exchange for incentives. Increasingly, it is being enforced through economics. As end-of-life rules tighten, fitness testing becomes mandatory and stricter for older vehicles, and concessions are weighted toward replacement, the cost of clinging to a very old vehicle rises. For many owners, retaining a vehicle past its fitness or registration validity becomes more expensive and more inconvenient than scrapping it and capturing the concession on a replacement. The net effect is that scrappage is moving from a choice for the few toward an economic default for genuinely old vehicles.
The economic tilt matters for buyers too. As older vehicles get pushed toward scrapping rather than resale, the supply of genuinely end-of-life cars in the used market should thin out over time. That is good for buyers, but only if you actively avoid the cars that are near the end of their legal life. A vehicle one or two years from its fitness or registration cut-off carries scrappage risk that a buyer can inherit unknowingly.
What This Means for Old-Car Owners and Used Car Buyers
The policy reads very differently depending on whether you own an old vehicle you are thinking of replacing, or you are shopping for a used car. Here is the practical takeaway for each.
If you own an old car: scrap or sell? The decision hinges on whether the vehicle still has genuine life left. If your car runs well, passes its fitness test, holds a valid RC and is in demand as a used model, selling it will almost always beat the 4% to 6% scrap value, often by a wide margin. The scrap route makes sense when the vehicle is at or near the end of its legal life (commonly 15 years for petrol and 10 years for diesel in NCR and several other regions), has failed or cannot pass fitness, or carries an expired or near-expiry RC. In those cases, the combination of instant scrap value, registration fee waiver and the road tax concession on your next car turns a liability into a structured benefit. The proposed up-to-50% rebate, if it is eventually enacted for BS-II-or-older vehicles, would sweeten this further, but you should not bank on it today.
If you are buying a used car: avoid inheriting an end-of-life vehicle. The flip side of tightening end-of-life rules is that a careless buyer can purchase a car that is closer to mandatory scrapping than the listing suggests. A diesel in the NCR that is already nine years old, or a petrol approaching its 15-year cut-off, may have only a short usable window before it must be deregistered or scrapped, with no easy way to re-register it in the same region. That risk is rarely advertised in a listing. The defence is simple: verify the vehicle's exact registration date, its fitness validity and its current RC status before you pay anything. A car that looks like a bargain can become an expensive mistake if it has to be scrapped within a year or two of purchase. Buyers in tier-2 regions face a related trap around diesel re-registration and NOC transfers, which we cover in the Delhi diesel NOC trap for tier-2 buyers.
Check Age, Fitness and RC Status Before You Buy
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Run Vahan VerifyFor a healthy used purchase, the same age-and-fitness discipline that protects you from scrappage risk also protects resale value. A well-documented car comfortably inside its legal life, with a clean RC and valid fitness, is exactly the kind of vehicle that holds value and is easy to transfer. If you are browsing in a specific city, the live inventory on used cars in Delhi and the wider city directory lets you compare age and price together, while general listings sit on VahanBazaar's browse page. Filter toward cars with several years of legal life remaining, and verify each shortlist before you visit.
Scrappage Quick-Reference Checklist
Whether you are scrapping or buying, these five points keep you on the right side of the policy.
1. Use only an RVSF. Only a Registered Vehicle Scrapping Facility can issue the Certificate of Deposit that unlocks the tax concession and registration fee waiver. An unregistered scrap dealer gives you nothing claimable.
2. Treat the 50% as proposed. Plan around the live up-to-25% (private) or up-to-15% (commercial) concession. The 50% rebate is a MoRTH proposal for BS-II-or-older vehicles and is not yet enacted.
3. Confirm your state's rules. Road tax is a state subject, so the precise concession percentage and period vary. Check your state transport department's notification before assuming a rupee figure.
4. Clear dues before scrapping. Settle any loan, lien or pending challan first. An unresolved encumbrance can block the scrapping and the deposit certificate.
5. When buying used, verify age and fitness. Run Vahan Verify on the specific car to confirm registration date, fitness validity and RC status. Avoid vehicles close to their end-of-life cut-off.
Don't Inherit an End-of-Life Car
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Frequently Asked Questions
Under the current Vehicle Scrappage Policy, you get a one-time road tax concession of up to 25% on a new private (non-transport) vehicle, and up to 15% on a new commercial (transport) vehicle, when you buy it after scrapping an old vehicle and producing the Certificate of Deposit. The concession is applied at the time of registering the new vehicle. The exact percentage and duration vary by state because road tax is a state subject, so the benefit you actually receive depends on the policy notified by your state transport department.
No. The 50% figure is a proposal, not active law. On 24 January 2025 the Ministry of Road Transport and Highways (MoRTH) proposed raising the one-time tax rebate to up to 50% for buyers who purchase a new vehicle after scrapping an older vehicle that is compliant with BS-II emission norms or earlier, broadly pre-2002 vehicles. As of now the enacted benefit remains up to 25% for private and up to 15% for commercial vehicles. The 50% figure should be read as proposed, not as a confirmed or currently available rebate.
At a Registered Vehicle Scrapping Facility (RVSF), the scrap value paid for your vehicle is roughly 4% to 6% of the ex-showroom price of that model. This is paid as instant cash or bank transfer against the vehicle and is separate from the road tax concession on a new car. On top of the scrap value, once the Certificate of Deposit is declared, the registration fee for the new vehicle is waived, and some manufacturers offer their own additional discount on a new purchase.
You can scrap your vehicle at a Registered Vehicle Scrapping Facility (RVSF). As of the latest data there are 129 or more RVSFs operational across 21 states. Only an RVSF can legally dismantle a vehicle and issue a valid Certificate of Deposit that unlocks the road tax concession and registration fee waiver. You should not hand your vehicle to an unregistered local scrap dealer if you want the policy benefits, because only an RVSF generates the official deposit certificate recorded on the government portal.
It depends on the vehicle's age, condition and roadworthiness. If your car is still passing its fitness test, has a valid RC and runs well, selling it as a used car almost always fetches more than the 4% to 6% scrap value. If the vehicle is at the end of its legal life (15 years for petrol, 10 years for diesel in NCR and several other regions), has failed or cannot pass fitness, or its RC has expired, scrapping at an RVSF is the cleaner route and also unlocks the tax concession on your next purchase. The policy has deliberately shifted from voluntary toward being enforced through economics, so end-of-life vehicles are increasingly uneconomical to retain.