Karnataka-2022 Registered Vehicle Scrapping Policy modified

Updated regulations tie tax incentives to ex-showroom prices of new vehicles

To avail concessions, individuals must submit a 'certificate of deposit'

The state cabinet has recently approved amendments to the regulations governing incentives for scrapping old vehicles, modifying the Karnataka-2022 Registered Vehicle Scrapping Policy that was implemented in January of the previous year.

Under the previous provisions, individuals scrapping non-transport vehicles were entitled to a 25% tax concession on the amount they had paid for their old vehicles. This concession was applied to the tax required when purchasing new vehicles.

The updated regulations now tie tax incentives to the ex-showroom prices of new vehicles rather than the scrapped ones. The transport department has introduced five tiers of concessions for both two-wheelers and four-wheelers. For two-wheelers, the tax concession ranges from Rs 1,000 to Rs 5,000, depending on the new vehicle’s price. Meanwhile, for four-wheelers, the concession varies from Rs 10,000 to Rs 50,000. The notification of these new rules is anticipated in the near future.

As per the state government’s decision, a 10% tax concession is extended to all construction equipment vehicles, including tractors. Newly registered transport vehicles will receive a 10% tax concession for up to eight years, while transport vehicles subject to lifetime tax will also enjoy a 10% concession. Autorickshaws, on the other hand, will benefit from a Rs 500 tax concession. To avail these concessions, individuals must submit a ‘certificate of deposit’.