Government's Big Decision: 50% Tax Rebate on Scrapping Old Vehicles

By Amit Jangra | Published Date : September 29, 2025

Himachal Pradesh now offers up to 50% tax rebate on new vehicle purchases when old vehicles are scrapped under the new vehicle scrappage policy.

Thinking of getting a new ride in Himachal Pradesh? You might just save big. The state has rolled out a fresh policy to scrap your old vehicle and you could get up to 50% tax rebate on the new one. Whether you own a personal car or drive a pickup, mini truck, or bus for work, this rule applies to both.

Why This Move?

Table of Contents

1. Why This Move?

2. What’s New in This Policy?

3. How to Get the Rebate?

4. Why This Matters

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leOld vehicles not only cause more pollution, but they're also less safe on the roads. To fix this, the government wants people to shift to newer, cleaner and safer vehicles. The goal is simple — fewer polluting engines, safer roads and better traffic flow.

According to officials, removing older BS-1 and BS-2 vehicles can really help with air quality in hilly areas like Himachal. That's why this new vehicle scrapping policy has been rolled out.

What’s New in This Policy?

Here are some key things vehicle owners should know:

• Tax rebate increased: Earlier, private vehicles got 25% and commercial ones got 15%. Now it’s up to 50%.
• Covers all types: Whether it’s a car, a truck, a 3-wheeler, or even a pickup, the benefit applies to all.
• Valid for years: For commercial vehicles, the rebate is valid for the next 8 years. For private ones, it’s valid for 15 years.
• Same vehicle category: You can only claim this if the new vehicle is the same type as the old one.
• Only on registration: For private vehicles, the rebate is given during first registration only.
• Extra for commercial use: Transport vehicles also get relief during token tax or SRT payments.

How to Get the Rebate?

You’ll need to take your old vehicle to a government-approved Registered Vehicle Scrapping Facility (RVSF). Once scrapped, they’ll give you a Certificate of Deposit. Submit this certificate when registering your new vehicle to get the rebate.

As of now, two RVSF centers are already working in Solan and Hamirpur. More centers are being planned across other districts too.

In the last one year, around 3,500 old vehicles have already been scrapped in the state, a number expected to rise fast with this new benefit.

Why This Matters

Scrapping your old vehicle isn’t just about saving some tax money, it's also a small step toward reducing pollution and getting unsafe vehicles off the roads.

And let’s be honest, if your work involves a pickup, mini truck, or bus, switching to a newer model could be a smart move right now. The scheme makes it easier to upgrade without breaking the bank.

Also Read: SML Isuzu Gathers Dealers and Suppliers in First-Ever Meet Under Mahindra Leadership

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Frequently Asked Questions on Commercial Vehicles

1. What is the new vehicle scrapping policy in Himachal Pradesh?

Ans: The policy offers up to 50% tax rebate when you scrap an old vehicle and buy a new one. It applies to both private and commercial vehicles.

2. Which vehicles are eligible for this tax rebate?

Ans: Vehicles running on old BS-1 or BS-2 standards are eligible. You must scrap the old vehicle at a government-approved RVSF to claim the benefit.

3. Does the policy apply to commercial vehicles like mini trucks and pickups?

Ans: Yes, the policy includes commercial vehicles such as mini trucks, pickups, buses and 3-wheelers. It’s valid for 8 years on transport vehicles.

4. How can I claim the tax rebate after scrapping my vehicle?

Ans: Scrap your old vehicle at an authorized center and get a Certificate of Deposit. Submit it during registration of the new vehicle to get the rebate.

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