What is Green Tax for Vehicles in India?

Green tax, also known as pollution or environmental tax, is an excise duty levied by the government on goods and objects that contribute to pollution. It is an initiative to curb the country's pollution level and promote the use of eco-friendly options.

By imposing a green tax on cars and bikes, the government aims to address the challenges caused by vehicular emissions and contribute to a sustainable and healthier future.

In a recent development, the government has proposed imposing a green tax on vehicles older than 15 years of age at the time of renewal of registration certificates. The tax will be lower for commercial vehicles but higher for vehicles used in a city with high pollution.

The green tax for cars after 15 years is usually high since these cars cause more pollution to the environment. Thus, the tax has played a crucial role in pushing the owners of old cars and bikes to scrap their old cars and buy new ones.

Also Read: Rules & Regulations Related to Road Tax in India

New Technology

The underlying thought behind imposing a green tax for cars, bikes and other commercial vehicles is the change in automobile technology.

Engines of vehicles that are old pollute the environment more compared to engines of new cars and bikes that use the latest technology, such as advanced fuel injection systems, catalytic converters and hybrid or electric powertrains.

This encourages vehicle owners to scrap their old vehicles and buy new ones.

Reduce Pollution

Another benefit of implying a green tax on vehicles is reducing pollution. This tax significantly helps reduce the city's air pollution level by discouraging the use of older and higher-emission vehicles.

It contributes to a cleaner and safer environment. Furthermore, reduced air pollution levels also contribute to better public health.

Eco-Friendly Options

In addition to this, the green tax imposed by the government is not just about reducing pollution. It is also about supporting the growth of the green automotive industry.

The government offers various subsidies and incentives to electric vehicle owners, which in turn supports the growth of the green automotive industry.

Also Read: State-wise Electric Vehicles (EV) Subsidies

When it comes to vehicles covered under the green tax, both commercial and personal usage vehicles need to pay the tax. The green tax in India is applied to petrol and diesel cars and motorcycles.

Vehicle owners who own a CNG vehicle or electric vehicle do not need to pay a green tax. The norms for green tax may vary depending on which type of vehicle an individual is using. The general guidelines for green tax are:

Commercial Vehicles: The green tax applies to commercial bikes, three-wheelers and four-wheelers that are more than 8 years old.

Personal Vehicles: If the automobile or bike is more than 15 years old, the green tax is levied for personal use.

The green tax is usually charged as a percentage of state road tax and imposed at the time of RC renewal or registration. The revenue collected from the green tax is generally used by the government to install emission monitoring stations.

The green tax structure imposed on private usage and commercial vehicles in India is given below.

Vehicle owners can easily pay green tax for cars and bikes online using the official VAHAN website. Below are the steps to pay the green tax price for a bike and a car.

Step 1: To pay the green tax, visit the official VAHAN website.

Step 2: Enter credentials to log in to your registered account.

Step 3: Next, enter your vehicle details, such as your registration number.

Step 4: The vehicle details will appear; select the "Pay Your Tax" option and then input your registered mobile number.

Step 5: After that, complete the OTP verification and then select the suitable tax options.

Step 6: After selecting tax, pay the outstanding dues using a preferred online method.

Step 7: Once the payment is done, collect the acknowledgement receipt and save it for future use.

Vehicle owners can also pay bike and car green tax prices offline by visiting the nearest RTO office. The procedure for the same is listed below:

Step 1: Visit the nearest RTO office.

Step 2: Ask the authority about a green tax form for a vehicle.

Step 3: Fill out the form correctly and submit it to RTO officials.

Step 4: The authority will inspect the vehicle to verify its age and emission level.

Step 5: After that, the authority will let you know about the outstanding green tax dues.

Step 6: Make a payment using a preferred online and offline mode.

Step 7: Once the payment has been made, collect the paid green tax acknowledgement receipt.

Failure to pay green tax on time can invite additional fines and penalties from the authorities. Vehicle owners also need to have a third-party bike and car insurance policy to avoid fines from the authorities.

Third-party insurance for four-wheelers and two-wheelers is mandatory by law in India. However, the coverage in third-party 2 and 4-wheeler insurance is limited. Hence, vehicle owners in India opt for a comprehensive bike and car insurance policy.

TATA AIG offers various bike and car insurance plans tailored to individual needs. From third-party insurance to own damage cover to comprehensive policies, we have plans for everyone.

A comprehensive policy not only covers third-party liabilities but also provides protection against damages to your own vehicle due to accidents, theft, or natural calamities, ensuring complete peace of mind for vehicle owners.

Further, with various add-ons like roadside assistance, zero depreciation, consumables cover, and more, we offer enhanced protection to vehicles.

Using our bike and car insurance calculator, you can easily compare the premium based on coverage and add-ons. With around 650+ claim experts on our board, we ensure that the vehicle claim process is easy and seamless.

Green tax in India is a great initiative to curb vehicular pollution. The imposed tax discourages the use of older vehicles that cause heavy environmental pollution and encourages people to buy environmentally friendly vehicles.

The green tax rates may vary depending on the engine capacity and usage. Furthermore, the green tax rates may vary from state to state.

Individuals with old vehicles can easily do car and bike green tax renewal by visiting the VAHAN portal or reaching out to the nearest RTO office.

What is the green tax if my vehicle is 15 years old?

The green tax for vehicles that are 15 years old or more in India varies by state. On average, it is around 10% to 25% of the road tax. For the exact amount, it is best to check with the local Regional Transport Office.

Can I pay a green tax for a car after 15 years?

Yes, it is possible to pay the green tax for a car that is 15 years old or older. The green tax must be paid at the time of renewing the vehicle's registration.

You can easily pay the green tax by visiting the VAHAN portal online or by visiting the nearest RTO office in your area. However, the process and fee may vary by state, so it is advisable to check with the RTO for specific details.

Are there any exemptions for green tax?

Yes, there is an exemption on green tax in India on certain vehicles such as hybrid vehicles, electric vehicles, etc. EVs are exempt from green tax due to their low or zero emissions.

Further, some states may offer exemptions or lower rates for hybrid vehicles, which are more environmentally friendly compared to conventional vehicles.