Green tax for cars in India is an environmental cess collected from older, more polluting vehicles. It applies annually at pollution certificate (PUC) renewal and is designed to incentivise the retirement of high-emission vehicles. Green tax rates range from ₹1,500 per year for older petrol cars to ₹5,000-10,000 per year for older diesel vehicles.
Electric vehicles are completely exempt from green tax in all Indian states. BS6 Phase 2 vehicles (new cars from April 2023) emit 90% less NOx than BS3 vehicles and qualify for reduced green tax rates.
Who Pays Green Tax?
Petrol vehicles over 15 years old: ₹1,500-2,500 per year. Diesel vehicles over 10 years old: ₹3,000-5,000 per year. The tax is collected at authorised PUC centres along with the pollution certificate renewal fee.
How Green Tax Compares to EV Benefits
An old diesel car pays ₹5,000+/year in green tax plus higher fuel costs. Switching to a pure EV eliminates green tax, road tax (in Delhi), and reduces running costs by ₹5,000-8,000/month in fuel savings.
What is green tax for cars in India?
Green tax is an environmental cess charged on older, more polluting vehicles at the time of pollution certificate (PUC) renewal. It applies to petrol cars over 15 years old and diesel cars over 10 years old. Rates are ₹1,500-5,000 per year depending on vehicle type and age.
Are electric vehicles exempt from green tax?
Yes — electric vehicles are fully exempt from green tax in India. They also benefit from road tax exemptions in Delhi and several other states. EVs are the most environmentally friendly and cost-effective vehicles from a tax perspective.
What is BS6 Phase 2 and does it affect green tax?
BS6 Phase 2 (BS VI Step 2) is the strictest emission standard in India, effective April 2023. BS6 Phase 2 vehicles emit significantly lower NOx, CO2, and particulate matter. They qualify for lower green tax rates compared to older BS3/BS4 vehicles.
How is green tax collected in India?
Green tax is collected annually at the time of pollution certificate (PUC) renewal. It is mandatory for vehicles over the specified age threshold. Payment can be made at authorised PUC centres along with the pollution certificate renewal fee.
Which Indian state charges the highest green tax?
Green tax rates vary by state. Delhi charges environmental cess on older diesel vehicles in addition to green tax. Maharashtra, Karnataka, and Uttar Pradesh also have green tax policies with varying rates. Check your state transport department for exact rates.
Official Resources: Parivahan Portal | India GST Portal | NHAI