India’s automotive sector is undergoing a major shift with the implementation of the New Car Scrappage Policy in 2025. Designed to phase out aging, polluting vehicles and stimulate the auto industry, this policy introduces strict Vehicle Scrap Rules 2025 that affect both private and commercial vehicle owners.
Whether you’re holding on to an old car for sentimental reasons or waiting for the right time to upgrade, understanding these new rules is essential. Here’s everything you need to know.
What Is the New Car Scrappage Policy?
The New Car Scrappage Policy is a government-led initiative aimed at removing unfit and polluting vehicles from Indian roads. First introduced in 2021 and coming into full force by 2025, the policy is part of a broader strategy to reduce carbon emissions, improve road safety, and modernize India’s vehicle fleet.
Under this policy, vehicles that fail fitness tests or exceed their legal operational age will be deregistered and sent for scientific scrapping.
Key Highlights of Vehicle Scrap Rules 2025
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Mandatory Fitness Tests
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Private vehicles older than 15 years and commercial vehicles older than 10 years must pass an Automated Fitness Test at designated centers.
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Failing the test means the vehicle will be deemed “End of Life” and eligible for scrappage.
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Deregistration of Unfit Vehicles
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If a vehicle fails two consecutive fitness tests, it will be permanently deregistered by the RTO.
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Re-registration may be allowed only after retrofitting and clearance from authorized testing centers.
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Green Tax for Older Vehicles
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A Green Tax of up to 50% of road tax will be levied on older vehicles to discourage prolonged use and fund environmental initiatives.
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Voluntary Vehicle Scrapping
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Owners can voluntarily scrap vehicles even before their fitness expiration to receive incentives and discounts on new purchases.
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Digitally Linked Scrap Certificates
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Post-scrappage, vehicle owners will receive a Digital Certificate of Deposit, which can be used to avail benefits like:
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Road tax rebates (up to 25% for private vehicles, 15% for commercial)
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Waiver of registration fees for new vehicles
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Manufacturer discounts
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Who Will Be Affected?
The New Car Scrappage Policy will impact:
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Individual car owners with vehicles older than 15 years.
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Fleet operators with outdated commercial vehicles.
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Government departments, which must scrap vehicles over 15 years old regardless of condition.
Why This Policy Matters
The implementation of Vehicle Scrap Rules 2025 is more than a regulatory shift—it’s a strategic push towards cleaner air, improved road safety, and economic stimulation. Here’s how:
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Environmental Impact: Older vehicles emit significantly more pollutants. Replacing them with newer, BS6-compliant models will lower emissions.
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Safety: Modern vehicles come with better safety standards and technologies.
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Economic Boost: The policy is expected to drive auto manufacturing, steel recycling, and create new jobs in the scrappage ecosystem.
How to Scrap Your Vehicle in 2025
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Locate a Registered Vehicle Scrapping Facility (RVSF) – These are certified centers where the scrapping process is documented and environmentally compliant.
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Submit Ownership Documents – PAN card, RC, and a KYC document are required.
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Get Your Vehicle Inspected and Scrapped – The facility will dismantle the vehicle and recycle the parts.
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Receive Certificate of Deposit – Use this to claim financial benefits when buying a new vehicle.
Challenges and Concerns
Despite its potential, the policy faces practical hurdles:
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Limited Infrastructure: India currently lacks a widespread network of RVSFs.
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Awareness Gap: Many vehicle owners are unaware of the new mandates and benefits.
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Sentimental Value: Owners of vintage or heirloom vehicles may resist scrapping, even if the vehicles are unfit.
However, the government is addressing these by incentivizing the industry, offering subsidies, and launching awareness campaigns.
FAQs – Car Scrappage Policy India 2025
Q1: Is scrapping my 15-year-old car mandatory under the new policy?
A: It becomes mandatory if your car fails the Automated Fitness Test. Otherwise, you can continue to use it after paying the Green Tax and passing periodic checks.
Q2: Can I retain my old car if it’s in good condition?
A: Yes, but only if it clears the fitness test. Failing it twice means it must be scrapped.
Q3: What are the benefits of scrapping my old vehicle voluntarily?
A: You’ll get tax rebates, manufacturer discounts, and a waiver on registration fees when purchasing a new vehicle.
Q4: Are electric vehicles subject to the same rules?
A: Electric vehicles also need to meet safety and fitness standards, but they are exempt from the Green Tax.
Q5: Where can I scrap my vehicle?
A: At an RVSF (Registered Vehicle Scrapping Facility) authorized by your state government.
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