Recently, investor Ashish Kumar Meher shared in a social media post that dealers charge 1 percent TCS (Tax Collected at Source) from those who buy cars worth more than 10 lakh rupees.

Buying a new car is everyone's dream. Spending lakhs of rupees on a shiny new car brings great joy. But did you know that if you buy a car worth more than 10 lakh rupees, the government also gives you a refund? This isn't an offer or a trick, but a clear and official government rule. Most people in the country are unaware of this rule and lose thousands of rupees in savings.

Recently, investor Ashish Kumar Meher shared in a social media post that dealers charge 1 percent TCS (Tax Collected at Source) from those who buy cars worth more than 10 lakh rupees. The good news is that this money can be returned to your account later as a full refund, but very few people claim it.

What is TCS?

When you buy a new car worth more than ₹10 lakh, the dealer charges you an additional 1% TCS. This means ₹10,000 TCS is deducted on a car worth ₹10 lakh, and ₹30,000 TCS is deducted on a car worth ₹30 lakh. This means this money comes out of your pocket, but it's not an expense. It's simply a tax entry that's submitted to the government, and you can later withdraw it in full. The reason for this deduction is to maintain records of expensive purchases under government regulations, but ultimately, this amount is yours.

Claiming TCS in Such a Case

1. When buying a car, be sure to obtain Form 27D from the dealer – this is a certificate that states the TCS amount deducted on your car. Many dealers don't provide this document without notice, so it's important to ask for it yourself.

2. Check Form 26AS when filing your ITR - When you file your income tax return, your Form 26AS displays your entire tax record. Ensure the TCS deducted from your car is recorded. The dealer has correctly credited it.

3. Claim a TCS refund in your ITR - Claim that 1 percent TCS as a refund in your ITR or have it adjusted against your remaining taxes. If your tax liability is zero, the entire amount is credited directly to your bank account. If you owe a small amount, the TCS is adjusted against that amount, and the remaining amount is credited to you. In this, you get a benefit of Rs 10,000 on a car worth Rs 10 lakh, Rs 20,000 on a car worth Rs 20 lakh, Rs 30,000 on a car worth Rs 30 lakh and up to Rs 50,000 on a car worth Rs 50 lakh.