FY 2025-26 Car Purchase TCS Refund Guide – Complete Process to Claim 1% TCS Refund
FY 2025-26 Car Purchase TCS Refund Guide – Complete Process to Claim 1% TCS Refund
Introduction
Nowadays, many people buy cars without paying much attention to the extra charges added to the final invoice. However, if you purchased a car worth more than ₹10 lakh during FY 2025-26, the showroom or dealer may have collected 1% TCS (Tax Collected at Source) from you.
Most taxpayers think this amount is a non-refundable extra expense. But the truth is, if your total taxable income is below the tax liability limit, you can claim this TCS amount back by filing your Income Tax Return (ITR).
In this article, we will explain the complete process in simple English so you can easily understand:
What is TCS on car purchase?
Where to check it?
How to file ITR?
How to claim refund successfully?
What is TCS on Car Purchase?
TCS stands for Tax Collected at Source.
Under the Income Tax Act, when a person purchases a motor vehicle worth more than ₹10 lakh, the seller or dealership collects 1% TCS from the buyer and deposits it with the government using the buyer’s PAN number.
This amount gets reflected in:
Form 26AS
AIS (Annual Information Statement)
Is TCS an Extra Tax?
No.
TCS is not a final tax. It works like an advance tax credit.
If your actual tax liability is lower or NIL, you can claim the deducted amount as a refund while filing your ITR.
Example
Suppose:
Car Price = ₹18 lakh
TCS Deducted = ₹18,000
Your Annual Income = ₹4 lakh
Since your taxable income is low and no income tax is payable, the full ₹18,000 can become your refund.
Who Can Claim TCS Refund?
You can claim TCS refund if:
Your total taxable income is below the taxable limit
Your tax liability is NIL or lower than TCS amount
The TCS amount appears in Form 26AS or AIS
You file your ITR correctly
First Step – Check AIS
Before filing your return, you should verify whether the TCS has been deposited properly.
Visit:
Steps:
Login using PAN and password
Open AIS (Annual Information Statement)
Select Financial Year 2025-26
Open Taxpayer Information Summary
You will see the vehicle purchase transaction and related TCS details there.
Why Form 26AS is Important?
Form 26AS acts like your tax passbook.
It contains:
TDS details
TCS details
Advance tax
Tax deposited against your PAN
If the car TCS is not visible in Form 26AS, refund processing may get delayed.
What if TCS is Not Showing?
Sometimes TCS deducted during January–March 2026 may not appear immediately because sellers file TCS returns later.
In such cases:
Wait until June 2026
Recheck Form 26AS
Contact the seller if still missing
ITR Filing Process
Step 1 – Select Correct Assessment Year
For Financial Year 2025-26, choose:
Assessment Year (AY): 2026-27
Step 2 – Choose Correct ITR Form
| Income Type | Applicable ITR |
|---|---|
| Salary + Bank Interest | ITR-1 |
| Share Market / Crypto | ITR-2 |
| Business Income | ITR-3 / ITR-4 |
Choosing the correct ITR form is very important for proper refund processing.
Step 3 – Fill Income Details
Enter all income correctly:
Salary income
Savings account interest
FD interest
Other income sources
Always match your details with:
Form 16
AIS
Bank statements
Step 4 – Add TCS Details
This is the most important step.
Go to:
Taxes Paid Section
Schedule TCS
There you will see:
Seller details
TCS amount
Financial Year
Verify all details carefully and save them.
How Refund is Generated?
If your tax liability becomes NIL after calculations, the system automatically treats the deducted TCS as refundable.
Example:
Total Tax Liability = ₹0
TCS Paid = ₹18,000
Refund = ₹18,000
Important Tips for Faster Refund
1. Link PAN with Aadhaar
Unlinked PAN may cause refund issues.
2. Validate Bank Account
Refund is credited only to validated bank accounts.
3. E-Verify Your ITR
After filing, complete Aadhaar OTP verification.
Without verification, your ITR remains invalid.
How Long Does Refund Take?
Usually:
15 to 45 days in normal cases
Sometimes longer depending on verification
The refund gets credited directly to your bank account.
Common Mistakes to Avoid
Wrong Assessment Year
FY 2025-26 corresponds to AY 2026-27.
Incorrect Income Reporting
Mismatch may lead to notices.
Forgetting E-Verification
Unverified ITR is considered incomplete.
Wrong Bank Details
Refund may fail if account is not validated.
Can You File Without a CA?
Yes.
If your income is simple and you only have salary, interest income, and TCS refund, you can easily file ITR yourself using the Income Tax portal.
Final Conclusion
If you purchased a car worth more than ₹10 lakh during FY 2025-26, the seller may have collected 1% TCS from you. Many people ignore this amount and never claim it back.
However, if your taxable income is low or your tax liability is NIL, you should definitely file your Income Tax Return and claim the refund.
Always check:
AIS
Form 26AS
Correct ITR form
Proper bank validation
A small amount of awareness can help you recover thousands of rupees legally.
FAQs
Q1. Is TCS mandatory on every car purchase?
No. It applies only when the vehicle value exceeds ₹10 lakh.
Q2. Can I get full refund of TCS?
Yes, if your tax liability is NIL or lower than the TCS amount.
Q3. Can salaried persons claim TCS refund?
Yes, salaried individuals can also claim refund through ITR filing.
Q4. Is filing ITR compulsory for refund?
Yes. Without filing ITR, refund cannot be claimed.
Q5. Can I file ITR myself?
Yes, simple cases can be filed online without professional help.
Comments
Post a Comment