Claim Your ₹10,000+ Refund: A Guide to TCS on Car Purchases for FY26
If you purchased a new car worth ₹10 lakh or more during the financial year 2025-26 (FY26), you might be eligible for a significant tax refund when you file your Income Tax Return (ITR).
RJ Kesari News Desk:Many taxpayers unintentionally leave this credit with the government simply because they forget to claim the 1% Tax Collected at Source (TCS) deducted by their car dealer.
This isn't an extra tax—it is an advance tax payment already made in your name. Here is how you can ensure this money lands back in your bank account.
What is 1% TCS?
According to Indian income tax regulations, when you buy a new vehicle priced above ₹10 lakh, the dealer is mandated to collect 1% TCS on the total sale price and deposit it with the government against your PAN.
To help you visualize how this adds up, here is a quick look at the TCS amount based on vehicle price:
| Car Purchase Price | TCS Amount (1%) |
| ₹10 Lakh | ₹10,000 |
| ₹15 Lakh | ₹15,000 |
| ₹20 Lakh | ₹20,000 |
How to Claim Your TCS Refund
Claiming your TCS credit is a straightforward process, provided you have your paperwork in order. Follow these steps when preparing your ITR:
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Verify the Deposit: Before filing your return, log in to your income tax account to check your Form 26AS and Annual Information Statement (AIS). Ensure the dealer has successfully deposited the TCS against your PAN.
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Contact the Dealer: If the TCS amount is not reflecting in your Form 26AS or AIS, contact your car dealer immediately to rectify the issue.
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File the Claim: When filling out your ITR form, navigate to the 'Taxes Paid' or 'TCS Credit' section. Enter the TCS details exactly as they appear in your tax records.
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Receive Your Refund: If your total tax liability is lower than the TCS already deposited, the surplus amount will be credited directly to your registered bank account as a refund. If you owe more tax, this amount will be adjusted against your total liability, reducing your final out-of-pocket payment.
Essential Documents to Keep Handy
To ensure a smooth filing experience, have the following documents ready:
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Car Purchase Invoice: The primary proof of sale.
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Form 27D: The official TCS Certificate issued by the dealer.
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Form 26AS & AIS: To verify that the government has received the tax credit.
Pro-Tips for Taxpayers
Tax experts strongly recommend a "measure twice, cut once" approach when filing your ITR.
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Match Before You File: Don't just rely on your internal records. Always cross-verify the entries in your Form 26AS and AIS against your invoice. Discrepancies here are the most common reason for rejected refund claims.
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Don't Ignore Small Entries: Even if the TCS amount seems modest compared to your total income, claiming every available tax credit is a smart financial habit. These "small" refunds can add up to thousands of rupees.