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Income Tax Return (ITR) Filing Tips: If you have purchased a new car worth Rs 10 lakh or more during the financial year 2025-26 (FY26), you have a great chance to save big while filing tax returns. When filing Income Tax Return (ITR), you can get a tax refund of at least ₹ 10,000 or more depending on the value of your car.

Many people often get stuck while buying a car due to lack of information. 1% TCS (Tax Collected at Source) They forget to claim the amount, due to which their money remains blocked with the government. Let us know what this 1% TCS is and how you can get it back while filing ITR.

What is 1% TCS deducted on vehicles?

As per the rules of the Income Tax Act, whenever a customer buys a new passenger car worth more than ₹10 lakh, it is legally mandatory for the car dealer to charge TCS of 1% of the total ex-showroom price of the vehicle.

• This is not an extra tax: Keep in mind that this is not any extra pocket money or penalty. This is similar to advance tax, which the dealer pays to you. PAN Card Deposits the amount against in the government account.

• Understand mathematics: If you have purchased a car worth ₹10 lakh, your TCS of ₹10,000 will be deducted. Similarly, if the car is priced at ₹20 lakh, TCS of ₹20,000 will be deposited and if it is a luxury car worth ₹50 lakh, TCS of ₹50,000 will be deposited. You can adjust or refund this entire amount with your final tax liability while filing ITR.

How to claim TCS while filing ITR? (Step-by-Step Claim Process)

To get this money back or get tax exemption, you have to follow the procedure given below:

1. Checking Form 26AS and AIS: Before filling the ITR form, login to your income tax e-filing portal. there your Form 26AS And Annual Information Statement (AIS) Download and check whether the car dealer has reflected (updated) that 1% TCS on your PAN or not. If the entry is not visible, immediately contact the car dealer to get it updated.

2. Select the correct section in ITR: When you are filling your income tax return form, ‘Taxes Paid’ Or ‘TCS Credit’ Go to the column. Enter the exact information of this tax credit deducted on car purchase there.

3. Refund or Adjustment: If your total tax liability at the end of the financial year is less than your total TDS/TCS deducted, this additional amount of ₹10,000 or more will be deposited directly into your account. In the form of refund to your bank account Credit will be given. If you have tax liability, this amount will reduce (adjust) your tax by that amount.

Keep these 4 important documents with you while making a claim

To avoid any kind of notice or hitch while claiming a refund from the Income Tax Department, you must have the following documents:

• Car Purchase Invoice: In which there is clear mention of the original price of the car and the deducted 1% TCS.

• Form 27D (TCS Certificate): This certificate is issued by the car dealer to the customer, which is a strong proof of tax deposited.

• Form 26AS and AIS Copy: For online matching and records.

Tax experts’ advice:

Never ignore your tax credit (TDS/TCS) in a hurry to file returns. Always match the AIS and Form 26AS data with your invoice before submitting the form. A small mistake can prevent the refund of your hard-earned money.