A resolution passed by the standing committee of the East Delhi Municipal Corporation said these taxis were owned by people from the economically weaker section and hence would be exempted from paying toll tax.
The municipal corporations have the authority of levying and collecting toll tax. The resolution will now have to be approved by the other two corporations in the city and then the rule will come into effect.
The toll booth in Gurgaon, Haryana has been removed, but the toll booth in Noida, Uttar Pradesh still collects toll tax from commuters.
"These taxis provide valuable service to the people by charging nominal rates and they are the lifeline of Delhi," said Sanjay Surjan, the municipal councillor who had proposed the resolution.
Other vehicles exempted from paying toll tax are ambulances, government, police, defence vehicles and hearses.
According to the civic bodies, there are about 7,000 black-and-yellow taxis operating in Delhi.