Bought a Car Above Rs 10 Lakh? Here’s How to Verify Your TCS Record
Bought a Car Above Rs 10 Lakh? Here’s How to Verify Your TCS Record
Purchasing a car is an exciting milestone, but if the price of your vehicle crosses Rs 10 lakh, there’s an additional tax you need to be aware of. Known as Tax Collected at Source (TCS), this amount is collected by the seller at the time of purchase under the Income Tax Act. This tax applies to all cars, whether new, used, or imported, ensuring that high-value transactions are tracked efficiently by the government.
Understanding TCS on Car Purchases
According to Section 206C(1F) of the Income Tax Act, sellers must collect TCS at 1% of the car’s value when the purchase price exceeds Rs 10 lakh. For instance, if you buy a vehicle for Rs 12 lakh, the dealer is required to collect Rs 12,000 as TCS. This system not only ensures transparency but also helps maintain records linking the buyer’s PAN with high-value transactions, thereby minimizing the risk of tax evasion.
Purpose of TCS and Its Benefits
The primary objective of TCS is to create a clear record of significant financial transactions. While it may seem like an extra expense, this tax is not lost money. Buyers can claim it as a refund while filing their Income Tax Return (ITR). Once the dealer collects the TCS, they provide Form 27D, which serves as proof of the tax paid.
Investment advisor Ashish Kumar Meher emphasizes that TCS essentially acts as an advance tax payment, which can later be adjusted against your total tax liability, ensuring you’re not paying extra in the long run.
How to Verify If Your TCS Has Been Recorded
To confirm that your TCS has been properly deposited, you should check Form 26AS on the Income Tax Department’s e-filing portal. This annual tax statement, linked to your PAN, displays entries for TDS, TCS, advance tax payments, and refunds.
If the TCS for your car purchase appears under the relevant assessment year, it indicates that the dealer has deposited the tax in your name.
“Form 26AS provides a complete view of all TDS and TCS entries for the financial year,” says Sujit Bangar, founder of TaxBuddy. “Records from 2009-10 onwards are available, ensuring that even if you misplace your car invoice, your tax data remains secure.”
Most people in India don’t know this…
— Ashish Kumar Meher (@AshishMeher7) November 28, 2025
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…
Steps to Claim TCS in Your ITR
Once you have Form 27D, match the details with Form 26AS while preparing your ITR. The TCS amount will be automatically reflected in the “Taxes Paid” section.
If your total tax liability is less than the combined TDS and TCS, you can claim a refund for the excess amount.
If your tax liability is higher, the TCS simply reduces the amount you owe.
Important Points for Car Buyers
Always verify your TCS in Form 26AS; failing to do so may prevent you from claiming the amount.
Ensure you collect Form 27D from the dealer immediately after purchase.
Delays or mistakes by the dealer, such as incorrect PAN entry or late deposit, can affect your ability to claim TCS.
It’s also important to note that this rule is applicable only for personal car buyers. Dealers, manufacturers, or companies purchasing vehicles for resale are exempt from this provision.
