Delhi’s tax-free EV policy explained: Who benefits and who misses out

The Delhi government has approved the new Delhi Electric Vehicle Policy 2026, introducing a series of incentives aimed at accelerating the adoption of electric vehicles while gradually reducing the use of petrol-powered vehicles. This policy will come into effect on July 1, 2026, and will be valid until March 31, 2030.One of the biggest highlights of the policy is that private buyers of electric cars priced below Rs 30 lakh (ex-showroom) will be exempted from road tax and registration fees by 100 per cent. This effectively reduces the upfront cost of owning an electric car in the capital. However, buyers planning to purchase electric vehicles priced above Rs 30 lakh will not be eligible for this exemption and will have to pay applicable taxes and registration fees.In addition to passenger cars, the policy also extends financial support to multiple electric vehicle sectors. Buyers of electric two-wheelers can get a subsidy of up to Rs 30,000, while those of electric three-wheelers can get a subsidy of up to Rs 50,000. People who buy electric cargo trucks in the N1 category can get incentives of up to Rs 1 lakh to encourage businesses to switch to cleaner commercial transport.The government has also earmarked significant funding for scrappage incentives to encourage owners of older internal combustion engine (ICE) vehicles to switch to electric vehicles. Depending on the vehicle category, the incentive amount ranges from Rs 5,000 to Rs 1 lakh. Under the policy, buyers of scrapped old petrol or diesel four-wheelers can get Rs 1 lakh, two-wheelers are eligible for Rs 10,000, three-wheelers are eligible for Rs 25,000 and N1 commercial trucks are eligible for Rs 50,000.In addition to financial incentives, the policy also sets out a roadmap for phased restrictions on registrations of new gasoline-powered vehicles. From January 1, 2027, only electric three-wheelers and N1 category goods vehicles will be allowed to be newly registered in Delhi. An even bigger shift will come on April 1, 2028, when the National Capital Region will stop registering new gas-powered motorcycles and scooters.It’s worth noting that this restriction only applies to new car registrations. Existing petrol two-wheelers and other internal combustion engine vehicles registered before the deadline can continue to be used as per the existing regulations.