Delhi’s tax-free EV policy explained: Who benefits, who loses?

The Delhi government has approved the New Delhi EV Policy 2026, introducing a series of incentives aimed at accelerating electric vehicle adoption while gradually reducing the use of petrol-powered vehicles. This policy will come into effect from July 1, 2026 and will be valid till March 31, 2030.One of the biggest features of the policy is 100 percent waiver on road tax and registration fees for private buyers purchasing an electric car priced below Rs 30 lakh, ex-showroom price. This effectively reduces the upfront cost of owning an EV in the capital. However, buyers planning to purchase an electric car priced above Rs 30 lakh will not be eligible for this discount and will have to pay applicable taxes and registration fees.Apart from passenger vehicles, the policy also provides financial support across several EV segments. Electric two-wheeler buyers can avail incentives of up to Rs 30,000, while electric three-wheelers are eligible for a subsidy of up to Rs 50,000. Those purchasing N1-class electric goods carriers may get incentives of up to Rs 1 lakh, encouraging businesses to switch to cleaner commercial transport.The government has also allocated significant funds for scrappage incentives to encourage owners of old internal combustion engine (ICE) vehicles to shift to EVs. Depending on the vehicle category, the incentive ranges from Rs 5,000 to Rs 1 lakh. Under the policy, buyers scrapping an old petrol or diesel four-wheeler can get Rs 1 lakh, while two-wheelers are eligible for Rs 10,000, three-wheelers Rs 25,000 and N1 commercial trucks Rs 50,000.Beyond financial incentives, the policy lays out a roadmap to restrict registration of new petrol-powered vehicles in phases. From January 1, 2027, only electric three-wheelers and N1-category goods carrier vehicles will be allowed to be newly registered in Delhi. A major change will come on April 1, 2028, when registration of new petrol-powered motorcycles and scooters will be stopped in the National Capital Region.It is important to note that the ban applies only to new vehicle registrations. Existing petrol powered two-wheelers and other ICE vehicles registered before the cut-off dates can continue to be used as per the prevailing rules.