Key Facts About TCS on Car Purchase for Car Buyers in India

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When purchasing a car in India, understanding TCS on car purchase is crucial to avoid unexpected tax deductions and ensure a smooth buying experience. Tax Collected at Source (TCS) is applicable if the car value exceeds ₹10 lakh, and it is collected by the seller at the time of transaction. Whether you’re buying with a loan or full payment, this tax is mandatory under the Income Tax Act. If you are a salaried individual or a business entity, TCS applies differently, and the paid amount gets reflected in your Form 26AS. Fortunately, the TCS amount can be claimed while filing your Income Tax Return, reducing your tax burden or even providing a refund if applicable. Knowing when and how TCS is deducted, and most importantly, how to claim it, can help you stay financially informed and compliant.