Vehicle Scrappage Policy in India 2026 — Age Limits, RVSF Process and CoD Incentives

Two sets of rules govern old vehicles in India today, and they are layered. Understand which applies to your vehicle before you plan anything.

VVMP (national). Effective in various phases from April 2022. Applies to all states. Commercial vehicles (yellow board, trucks, buses) over 15 years must pass a stricter fitness test annually; government-owned vehicles over 15 years are mandatorily scrapped from April 2022 across India. Private (white board) vehicles over 20 years must pass a fitness test at 20 years to renew registration for a second term; otherwise they must be scrapped. The VVMP CoD incentive is voluntary — you can keep the vehicle if it passes fitness.

NCR age ban. Effective since the 2015 NGT order and the 2018 Supreme Court ruling in the Delhi pollution matter. Applies specifically to Delhi-NCR (Delhi, Haryana, parts of UP, parts of Rajasthan) — not nationally. Diesel vehicles over 10 years and petrol vehicles over 15 years are not allowed to ply in NCR. The RC is not cancelled automatically, but the vehicle cannot be registered or re-registered in NCR and enforcement can impound vehicles found on the road.

Some private-vehicle owners outside NCR are surprised to learn their 12-year-old diesel is perfectly legal in Pune or Chennai but cannot be taken to Delhi. The NCR rule is geographic, not national; moving the vehicle outside NCR is a legitimate alternative to scrapping.

A Registered Vehicle Scrapping Facility (RVSF) is an authorised scrapping yard notified by MoRTH and operated under prescribed environmental and data-security standards. The full list of RVSFs is published on the MoRTH and state transport department websites and updated as new facilities come online.

Each RVSF must meet specific criteria: adequate land area with proper drainage and pollution controls, authorised de-pollution bay for fluid extraction, certified dismantling equipment, GPS-linked vehicle intake system that photographs VIN and plates, direct integration with the VAHAN database for real-time RC status update, and on-site record-keeping for a minimum period prescribed by the rules.

Why only RVSFs. The CoD (Certificate of Deposit) — the document that unlocks the tax rebate and OEM bonus — can only be issued by a notified RVSF. A local kabadiwala or unorganised scrap dealer may offer a higher cash price for your metal and plastic, but they cannot issue a CoD, cannot cancel your RC, and cannot generate the legal paper trail the state RTO needs.

As of early 2026, several dozen RVSFs are operational across metros and Tier-1 cities. Delhi-NCR has the densest concentration (Maruti-Toyotsu joint ventures, Mahindra Cero, CEID Consultants sites). Maharashtra, Gujarat, Karnataka, Tamil Nadu, Telangana have 5-15 RVSFs each. Many states are adding more each quarter. Check the current list before planning a scrap.

Once you decide to scrap, the process is standardised across RVSFs. Here is what a typical scrap visit looks like.

Step 1. Book a slot with the RVSF — either online through their portal or by phone. The RVSF will ask for vehicle registration number, make, model, and preferred date. Most RVSFs accept appointment-free walk-ins but slot booking speeds up processing.

Step 2. Arrive at the facility with the vehicle and documents — original RC, valid insurance (or expired insurance with details), last fitness certificate if commercial, NOC from financier if the vehicle ever had a loan (even if closed), owner ID, PAN and Aadhaar.

Step 3. Vehicle intake. The RVSF photographs the vehicle from all angles, records VIN and engine number, scans the plates, and logs entry into the VAHAN-linked intake system. The owner signs a scrapping consent form.

Step 4. De-pollution. Fluids — engine oil, coolant, transmission fluid, AC refrigerant, fuel — are drained safely. Airbags, batteries and catalytic converters are removed for separate processing. This step takes 1-2 hours.

Step 5. Dismantling. The vehicle is stripped of reusable parts (seats, wiring, electronics) for secondary sale. The shell is separated into ferrous and non-ferrous metal streams, plastics, glass and residual waste. Everything is weighed and logged.

Step 6. Payment and CoD issue. The RVSF weighs the scrap value of the vehicle (typically Rs 25,000 to Rs 1,50,000 for a passenger car depending on age, condition and metal prices) and pays the owner by bank transfer or cheque. At the same time, the RVSF issues the Certificate of Deposit — an electronic certificate lodged in the VAHAN database and a printed paper copy to the owner. The RC status in VAHAN changes to 'Scrapped' automatically.

Step 7. Post-scrap. The paper CoD must be kept safely; it is the evidence you will present to an OEM for the scrap bonus on a new car and to the state RTO for the road-tax rebate and registration waiver. The CoD is typically valid for 2 years from issue (state-specific), so there is a window in which to buy a new vehicle.

The Certificate of Deposit is the legal instrument that unlocks scrap-linked benefits under VVMP. It is issued by the RVSF at the point of scrap and captures vehicle details (reg number, VIN, engine number), scrap date, owner details and the RVSF's authorisation code. It is lodged in VAHAN and printed for the owner.

Rupee value of the CoD. The CoD itself has no fixed monetary value — it is a tradable instrument that entitles the holder to specific benefits when purchasing a replacement vehicle:

Concrete example. On a Rs 10 Lakh new car purchase in Delhi, the approximate benefit stack is: scrap value of old car Rs 60,000 received up-front, road-tax rebate of Rs 30,000 (25 percent of ~Rs 1.2 Lakh road tax), OEM scrap bonus of Rs 50,000 (5 percent of Rs 10 Lakh), registration fee waiver Rs 600-1200. Total benefit worth roughly Rs 1.4 Lakh plus the scrap value. That is the rupee value of using an RVSF and a CoD versus scrapping at a kabadiwala.

CoD transferability. The CoD can be used by the owner themselves on a new purchase, or transferred to another person (typically a family member) subject to state transport rules. A transferred CoD may not retain all the tax benefits; check state rules.

CoD validity. Most states set a 2-year window from issue. If you do not purchase a new vehicle within that window, the CoD lapses and you lose the tax rebate and OEM bonus opportunity. The scrap value is always paid up-front and does not depend on the CoD being redeemed.

Nearly every major OEM in India has signed up to the scrappage incentive programme. The discount is a voluntary industry gesture coordinated with MoRTH, typically 5 percent of the ex-showroom price of the new vehicle against a valid CoD from a notified RVSF.

Participating OEMs as of 2026 include Maruti Suzuki, Hyundai, Tata Motors, Mahindra, Kia, Honda, Toyota, MG Motor, Skoda, Volkswagen, Nissan, Renault, BYD, Citroen. The discount is automatically applied at the dealer when you present the CoD at purchase.

Some OEMs layer additional benefits on top. Maruti Suzuki's 'Nexa Scrap' programme occasionally adds accessory kits. Tata Motors runs focused exchange events that combine CoD discount with festive year-end offers. Mahindra offers combined CoD + Mahindra Cero Recycling scrap-at-dealer convenience. Check the specific OEM's current scheme when you are ready to purchase.

The OEM bonus does NOT stack with other major promotional discounts in most cases. If the dealer is running a corporate/loyalty discount of 7 percent, the CoD bonus typically substitutes for it rather than adding on. Always ask the dealer to show the exact invoice breakdown so you see whether CoD + other discounts apply simultaneously.

For new car shopping with a CoD in hand, see our new car negotiation guide — the CoD is one lever in a full negotiation set.

The road-tax rebate is the tax benefit you receive on registering the replacement vehicle after scrapping the old one. This is a state-level benefit; MoRTH set a guideline of up to 25 percent for private vehicles and up to 15 percent for commercial, but each state notifies its own rebate.

Early-adopter state rebates as of 2026 (subject to change):

Registration fee waiver. Separate from road tax. Some states waive the nominal registration fee (Rs 600 for a private car, Rs 1000 for commercial) entirely on new vehicles purchased against a CoD. Others apply a 50 percent discount. Check state notification.

Practical calculation. On a Rs 15 Lakh new car in Maharashtra, the road tax is roughly 11 percent of ex-showroom — around Rs 1.65 Lakh. A 25 percent rebate on road tax is Rs 41,250. Add the OEM 5 percent bonus (Rs 75,000 on ex-showroom), scrap metal value (Rs 80,000 for a mid-size SUV), and total benefit can exceed Rs 2 Lakh on a single replacement transaction.

For detailed comparison of new-car taxation and total cost, see our TCO guide for Indian family cars.

If your vehicle is registered in or routinely driven in Delhi-NCR (Delhi, Gurugram, Faridabad, Noida, Ghaziabad, Sonipat, parts of Bahadurgarh, parts of Greater Noida), the 2018 Supreme Court order applies independent of VVMP.

Diesel vehicles over 10 years cannot ply in NCR. Petrol vehicles over 15 years cannot ply. Enforcement is done by Delhi Traffic Police and NCR pollution squads with routine drives and impoundment of non-compliant vehicles. A 12-year-old diesel registered in Delhi has three options at age 10: (a) move the vehicle out of NCR to another state via NOC and re-registration, (b) scrap it via RVSF for VVMP benefits, (c) keep it garaged and unused in NCR (risky, enforcement can still impound).

Moving out of NCR. You can obtain an NOC from the Delhi RTO, re-register the vehicle in another state (typically where a family member or friend can be the resident registered owner), and continue using the car there. Inter-state re-registration has its own cost and procedure — see our inter-state re-registration guide.

Scrapping in NCR. NCR has the densest concentration of operational RVSFs in India. Maruti-Toyotsu, Mahindra Cero, Tata Motors, CEID Consultants all operate facilities across NCR. Slot booking is easy. This is often the most practical exit for an NCR diesel hitting age 10.

What happens if you simply ignore the rule. Traffic police can and do impound non-compliant vehicles in NCR, with release conditional on either moving the vehicle out of NCR or scrapping. The impoundment fee plus storage charges plus the wasted time usually exceed the cost of a planned scrap. Plan ahead; the 10-year mark is not a surprise.

Scrapping is not always the best financial choice. Run the calculation before you commit.

When scrapping wins. You drive an NCR diesel at age 10 or NCR petrol at age 15 — no real choice. Your 20-year-old private vehicle outside NCR fails the fitness test — must scrap. Your commercial vehicle fails the 15-year fitness test — must scrap or face scrap-by-default. You are buying a new car and the total CoD-linked incentive (scrap value + tax rebate + OEM bonus) exceeds the used-resale value of the old car.

When scrapping loses. Your private vehicle is 8 years old and passes fitness easily — the open used-car market likely pays more than scrap value. You are outside NCR and the vehicle is in good condition — can continue to use it until the 20-year fitness trigger. You can sell the vehicle to a buyer in a state where it has remaining legal life (e.g. an 11-year-old diesel from Delhi to a rural Uttar Pradesh buyer).

Use VahanBazaar and other used-car portals to compare the likely resale value honestly before you commit to scrap. If the resale value is significantly above the full CoD benefit, selling on the open market is the better financial route. If resale value is near zero (NCR-affected car or a failed-fitness vehicle), scrap is the right answer.

Consult a qualified RTO professional for state-specific nuances, especially on commercial vehicle depreciation and GST treatment.

Even after the vehicle is physically outclassed, paperwork matters. Keep the following for at least 7 years (income-tax retention standard).

From the RVSF: the original printed Certificate of Deposit, the scrap value payment receipt and bank transfer reference, the scrapping consent form copy, the vehicle intake photos if the RVSF shares them, the invoice for any RVSF services.

From the RTO: the updated VAHAN record showing 'Scrapped' status (printable from vahan.parivahan.gov.in), the RC cancellation confirmation.

From insurance: the claim settlement letter (if any) and the confirmation of policy closure on the scrapped vehicle — the insurance policy is cancelled and any unutilised premium may be eligible for a pro-rated refund.

From loan (if any): the clearance letter from the financier confirming no dues (should be obtained before scrap) and the hypothecation removal record from VAHAN.

At tax time, the RVSF scrap value payment may need declaration in your ITR depending on tax treatment and state rules. Consult a qualified chartered accountant. For commercial vehicle operators, the capital-gains or depreciation write-down treatment is more complex and requires specialist advice.