Ad Code

TCS ON CAR PURCHASE IN INDIA – COMPLETE GUIDE (2026)| ActiveTaxPro Advisory!

ActiveTaxPro May 05, 2026

TCS ON CAR PURCHASE IN INDIA – COMPLETE GUIDE (2026)| ActiveTaxPro Advisory!

ActiveTaxPro Advisory | Tax & Compliance Experts

Introduction

When you buy a car in India, you don’t just pay the showroom price—you may also need to pay TCS (Tax Collected at Source). Many buyers are confused about why TCS is charged, how much is applicable, and how to claim a refund.

In this guide, we explain everything about car purchase TCS under Section 206C(1F) in simple terms.

What is TCS?

TCS stands for Tax Collected at Source.
It is a tax that the seller (car dealer) collects from the buyer at the time of sale and deposits with the government.

For car purchases, TCS is applicable under Section 206C(1F) of the Income Tax Act.

When is TCS Applicable on Car Purchase?

TCS is applicable if:

  • The car value exceeds 10 lakh
  • It applies to each individual invoice

Applicable on:

  • New car purchases
  • Cars priced above 10 lakh

Not applicable on:

  • Cars priced below 10 lakh
  • Generally not applicable on used cars (unless specified)

TCS Rate on Car Purchase

Condition

TCS Rate

  • Buyer with PAN

  • 1%

  • Buyer without PAN

  • 5%

Example:
If you buy a car worth 12 lakh:

  • TCS = 1% of 12 lakh = 12,000

Key Points You Must Know

  • TCS is calculated on the total car value, not just the amount above ₹10 lakh
  • The total value includes GST and accessories
  • The dealer collects TCS and deposits it with the government
  • You will receive a TCS certificate (Form 27D)

Can You Claim TCS Refund?

✔ Yes, absolutely!

TCS is not an extra cost—it is:

  • Deposited against your PAN
  • Available as credit in your tax account

If your total tax liability is lower:
You can claim a refund while filing your ITR

How to Claim TCS in ITR?

1.    Check your Form 26AS

2.    Verify the TCS entry

3.    Include it in your ITR under “TCS Credit”

4.    It will be adjusted against your total tax liability

Common Mistakes to Avoid

Not providing PAN (higher TCS will be charged)
Ignoring TCS while filing ITR (refund loss)
Not checking Form 26AS

Conclusion

TCS on car purchase is a compliance mechanism used by the government to track high-value transactions.
The good part is—you can fully claim it while filing your Income Tax Return.

Need Expert Help? – ActiveTaxPro Advisory

If you need help with:

  • TCS refund claims
  • ITR filing
  • Tax planning

Contact ActiveTaxPro Advisory

✔ Accurate Filing
✔ Maximum Refund Support
✔ Trusted Tax Experts

Ad Code