The 50% scrappage road tax rebate you may have read about is not law yet. Here is exactly what you can claim today, stacked and sourced.
Scrap your 15-year-old car in 2026 and the road tax rebate you actually get is 25%, not the 50% figure floating around online. That bigger number is a Ministry of Road Transport and Highways (MoRTH) proposal from January 2025 that still has not been notified into law.
Here is the real math on what scrapping an old vehicle saves you right now, and why waiting for the 50% rate could mean waiting years.
What’s Actually Live vs What’s Just Proposed
India’s vehicle scrappage policy has been law since April 1, 2022, under the Central Motor Vehicles (Twenty-Fourth Amendment) Rules, 2021. It is not new. What changed is that MoRTH floated a plan to more than double the benefit, and several blogs have been reporting the bigger number as if it already applies. It does not.
| Benefit | Currently Live (enacted 2022) | Proposed, Not Law (floated Jan 2025) |
| Road tax rebate, private vehicles | Up to 25% | Up to 50% |
| Road tax rebate, commercial vehicles | Up to 15% | Up to 50% |
| Applies to | Any vehicle with a valid Certificate of Deposit from an RVSF | BS-II emission standard or older, broadly pre-2002 |
| Status as of August 2026 | Enforced in states that have adopted it | Under consideration, no notification issued |
How Much a Scrappage Certificate Is Worth Today
Four things stack up when you scrap an old vehicle at a Registered Vehicle Scrapping Facility (RVSF) and get a Certificate of Deposit, and none of them need the 50% proposal to exist:
- Scrap value: roughly 4-6% of your new vehicle’s ex-showroom price, paid out for the metal and parts.
- Road tax rebate: up to 25% for a private vehicle, up to 15% for commercial, on the new vehicle’s registration.
- Registration fee waiver: the fee for issuing a fresh registration certificate is waived outright.
- Manufacturer discount: Maruti Suzuki, Tata Motors, Hyundai, Kia and Toyota all signed on to give 1.5% of the ex-showroom price or ₹20,000, whichever is lower, against a valid certificate, per the government’s August 2024 announcement. Mercedes-Benz India went further, with a flat ₹25,000 on top of existing offers.
On a ₹6 lakh hatchback, that is roughly ₹24,000-36,000 in scrap value, plus whatever slice of your road tax the 25% rebate removes, plus ₹9,000 (1.5%) from the manufacturer. Real money, without needing a single new policy to pass.
Which Cars Actually Get Scrapped Under This
The scheme targets the vehicles most likely to be 15+ years old and BS-II or earlier: first-generation Marutis, old diesel-era hatchbacks, and a huge chunk of India’s two-wheeler fleet. The replacement is usually another budget entry car.
The Maruti Suzuki Alto K10 and the Maruti Suzuki WagonR are the two most common upgrades dealers report for scrappage-certificate buyers. Both sit at the price point where a ₹20,000 manufacturer discount and a 25% road tax cut actually move the needle on the on-road price.
| Model | Approx. ex-showroom (base) | OEM scrappage discount | Road tax rebate impact |
| Maruti Alto K10 (base) | ₹4.99 lakh | 1.5% or ₹20,000, whichever lower | 25% off applicable road tax slab |
| Maruti WagonR (base) | ₹5.85 lakh | 1.5% or ₹20,000, whichever lower | 25% off applicable road tax slab |
Worth comparing the two side by side before you book. Our Alto K10 vs WagonR comparison lines up the boot space, ground clearance and service costs, since the scrappage discount is roughly identical on both and shouldn’t be the deciding factor.
Should You Wait for the 50% Rebate?
No. The 25%/50% proposal has been sitting with MoRTH since January 2025 with no draft notification published as of August 2026, a year and a half later. Road tax is a state subject, so even after a central notification, individual states still have to adopt it.
That is the same lag that has meant some states never fully implemented the original 25% rule either. If your current vehicle is already past its 15-year re-registration deadline or failing a fitness test, the certificate you can bank today is worth more than a policy that has spent 19 months in limbo.
This also stacks on top of, not instead of, the price cuts from GST 2.0, a separate central tax reform that has already pushed manufacturers into repeated price hikes this year, including Tata’s own September 1 increase.
A scrappage certificate is one of the few remaining levers still fully in your control regardless of what OEMs do to sticker prices.
The Step-by-Step, in Plain Terms
Take your old vehicle to an RVSF (129+ centres across 21 states as of the last count), get it scrapped, and you walk out with a Certificate of Deposit. That certificate is what you hand your new dealer and your new RTO.
No certificate, no rebate, no manufacturer discount. Roughly 4 lakh vehicles have been scrapped through this system so far, a number that will only climb as more states enforce fitness-test deadlines on older vehicles.
Is the 50% scrappage rebate actually available anywhere in India right now?
No. As of August 2026 it remains a MoRTH proposal from January 2025 that has not been notified into law in any state. The enacted, claimable rate is 25% for private vehicles and 15% for commercial vehicles.
Does the scrappage discount apply to two-wheelers as well as cars?
Yes, the road tax rebate and Certificate of Deposit process apply to two-wheelers too, though individual manufacturer discount schemes vary by brand and are usually announced separately from the car-focused MoUs.
Can I combine the scrappage rebate with GST 2.0 savings and current manufacturer offers?
Yes. The scrappage road tax rebate, the manufacturer’s scrappage-specific discount, and any unrelated festive or GST 2.0 linked price cut are separate and stack, since they come from different parts of the price build-up: tax, registration, and ex-showroom price.
