For instance, a dealer is required to collect ₹12,000 asTCS when you purchase a car worth ₹12 lakh.
The purpose of TCS is to assist the government in monitoring high-value transactions and preventing money laundering or tax evasion. Since there are not many but substantial retail transactions for cars over the threshold, TCS makes sure that the buyer's tax identification is documented.
Additionally, if a vehicle's value exceeds ₹10 lakh, it is covered by TCS regardless of whether it is new, old or imported. In this regard, the legislation makes no distinction between new and used cars.
According to a recent X post by investment advisor Ashish Kumar Meher, the TCS can be claimed as a refund while filing the Income Tax Returns (ITRs).
Most
people in India don’t know this… but when you buy a new car in India the government actually owes you money back.
Yes, a refund. And it’s already linked to your PAN.
Whenever you buy a car above ₹10 lakh, the dealer collects 1% TCS.
So a ₹10L car → ₹10,000 TCS
A ₹30L…
— Ashish Kumar Meher (@AshishMeher7) November 28, 2025
After deducting the TCS on a car purchase, the dealer submits the amount to the government. Additionally, the dealer provides you with a TCS certificate, usually in the form of Form 27D.
You should download your yearly tax statement, Form 26AS, from the e-filing portal of the Income Tax Department to confirm that the TCS has been accurately recorded. If the TCS reflects under the relevant assessment year, it means the amount has been deposited under your PAN.
Form 26AS is an annual tax statement connected to your PAN. It contains information on advance tax, TDS, TCS, refunds, and high-value transactions. The Form guarantees that the TCS record is available and securely preserved in the tax system, even if a car buyer misplaces the invoice.
“Form 26AS can view every TDS and TCS entry for the entire year. All 26AS records from 2009–10 to the present are available on the portal,” TaxBuddy founder Sujit Bangar told CNBC Awaaz.
How to Claim the TCS Amount While Filing ITR
Collect Form 27D.
Verify TCS details in Form 26AS.
Compute Your Tax Liability.
File Your ITR.
Review and Confirm Refund.
The TCS amount will, by default, appear in the 'Taxes Paid' part of your ITR for the relevant financial year. All you have to do is make sure that the total amount corresponds to what is mentioned in your 26AS.
You are entitled to a refund if your annual tax burden (after additional TDS or dues) is less than the TCS plus TDS collected. The TCS simply lowers your net tax due if your liability is higher.
Therefore, the 1% TCS is simply an advance tax deposit that either lowers your tax bill or is refunded.
What to Watch Out For
When filing ITR, some taxpayers fail to verify their 26AS or claim the TCS, which leads to missing refunds or needless tax payments.
Dealers may occasionally neglect to deposit TCS under the buyer's PAN or postpone reporting.
The TCS will not show up in 26AS in such a scenario, and you will not be able to claim it. Always request Form 27D and confirm in 26AS before filing.
The TCS rule applies to retail buyers — not to dealers, manufacturers, or corporate resellers.
