Up to 50% Tax Relief on New Vehicles by Scrapping Old Ones: Rajasthan Unveils Golden Opportunity for Buyers

In a major boost to consumers, investors, and sustainable development, the Rajasthan government is set to roll out the Rajasthan Vehicle Scrapping Policy–2025, offering substantial financial incentives for citizens who scrap old and unfit vehicles. Under the proposed policy, buyers can avail tax benefits of up to ₹1 lakh—amounting to nearly 50% relief—on the purchase of new vehicles by submitting a valid scrapping certificate.

The policy was discussed and approved in principle during a cabinet meeting chaired by Chief Minister Bhajanlal Sharma, and is expected to be implemented soon.

Old Vehicles to Be Phased Out

Once the policy comes into force, 15-year-old unregistered, unfit, and obsolete vehicles will be systematically removed from roads across the state. Owners scrapping such vehicles at authorised facilities will receive a Certificate of Vehicle Scrapping (CVS), which can be used to claim tax rebates while purchasing a new vehicle.

The initiative aims to reduce pollution, improve road safety, and modernise the state’s transport ecosystem.

Secure Custody of Chassis Numbers

Deputy Chief Minister Dr Premchand Bairwa said that under the policy, registered scrappers will keep the cut piece of the vehicle’s chassis number in safe custody for six months from the date of issuing the CVS. Thereafter, it will be deposited with the concerned District Transport Officer, where it will remain secured for an additional 18 months.

The policy is designed to strengthen the circular economy, enabling reuse of materials such as steel, aluminium, plastic, rubber, and other components. This will provide affordable raw materials to the automobile, steel, and manufacturing sectors.

Major Incentives for Scrapping Units

To attract private investment, the government has announced special incentives for registered scrapping units, including:

• Capital investment subsidies for the first 20 units
• State tax exemptions
• Interest subsidies
• Concessions on stamp duty
• Rebates on electricity bills

Recycling and scrapping-related startups will also receive support under the Rajasthan Startup Policy, encouraging entrepreneurship and job creation.

Rajasthan AI & ML Policy 2026 Approved

In the same cabinet meeting, the government approved the Rajasthan AI & ML Policy–2026, aimed at transforming the state into a hub of innovation and digital governance. The policy focuses on the ethical, transparent, and secure use of Artificial Intelligence and Machine Learning to enhance public service delivery, administrative efficiency, and innovation-driven economic growth.

Special emphasis has been placed on data security, cyber safety, bias reduction in AI systems, and clear decision-making processes. The policy also provides for the establishment of an Artificial Intelligence Centre of Excellence in the state.

AI Education and Skill Development

Under the AI policy, every government department will identify AI-based use cases and appoint an AI Nodal Officer. AI education will be promoted in schools, ITIs, polytechnics, and colleges, along with structured training programmes for youth, teachers, and government employees. Additional incentives will be offered to industries, MSMEs, startups, and research institutions engaged in AI initiatives.

Pachpadra Refinery Nears Completion

Parliamentary Affairs Minister Jogaram Patel informed that work on the 9 MMTPA Pachpadra refinery-cum-petrochemical complex has reached its final stage. The revised project cost stands at ₹79,459 crore, with the state government holding a 26% equity stake. The refinery is proposed to be inaugurated in January, likely by Prime Minister Narendra Modi.

With the introduction of the scrapping policy, AI roadmap, and industrial push, Rajasthan is positioning itself as a forward-looking state balancing economic growth, technology, and environmental sustainability.