For many Indians, purchasing a vehicle generally the second-most costly purchase after a home, comes with enthusiasm, preparation and, increasingly, a tax component that many overlook: TCS or Tax Collected at Source.
When you purchase a car for more than Rs 10 lakh, the seller must collect TCS from you at 1% of the selling price and deposit it with the government in accordance with income tax regulations.
However, while completing their income tax forms, many people either overlook the deduction or neglect to claim the credit. This sometimes leads to misunderstanding, erroneous tax payments, or lost refunds.
How can you confirm the deduction of TCS?
“The seller receives TCS when a vehicle is bought for more above Rs. 10 lakh. To verify whether it was done, just log into the Income Tax Portal and download Form 26AS. Go to the “e-File” page, choose the appropriate assessment year, and check to see whether TCS has been mentioned. If so, do not worry—this sum will be deducted from your overall tax obligation when you file. A refund would be given if the total tax paid (TDS + TCS) exceeds the amount owing, according to Sujit Bangar, founder of TaxBuddy.
Form 26AS is a consolidated yearly tax statement that documents every tax-related transaction connected to your PAN, including TDS (Tax Deducted at Source), TCS, self-assessment tax, refunds given, and high-value transactions. The TCS will immediately show up here if the dealership deposited it appropriately.
This digital trail guarantees that the Income Tax Department already has the invoice in your name even if you lose it or forget the deduction.
How to submit an ITR and claim the TCS
It is easy to claim after you have verified the TCS entry on Form 26AS. When you submit your income tax return, the TCS amount is automatically generated in the tax paid part in most ITR utility programs, including on the Income Tax Portal. All you have to do is confirm that the numbers correspond to your 26AS.
If your total tax burden is less than the amount of TDS and TCS paid throughout the year, the system will automatically calculate a refund. If your responsibility is larger, the TCS credit merely decreases the amount you need to pay.
How to verify additional TCS gathered during the year
TCS is applicable to more than just car purchases. TCS may also be drawn to payments for overseas remittances sent under the Liberalised Remittance Scheme (LRS), international travel packages, and other commercial activities.
“You may view every TDS and TCS entry on Form 26AS,” says Bangar. When signed into the Income Tax Portal, you may access this. It displays each and every deduction and collection. As of the now, the tax site has 26AS up to AY 2009–10.
This implies that any TCS from a bank handling international transfers, a travel agency, or a vehicle dealership will appear in the same location. Knowing how to monitor and claim TCS is now a crucial component of personal tax preparation as it becomes more prevalent in financial transactions.
