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+{{htmlmetatags>metatag-description=(Bought a car above Rs 10 lakh and the dealer added 1 percent extra? That is TCS under section 206C 1F. Learn what it is and how to claim it back in your ITR.)&metatag-keywords=(TCS on car purchase above 10 lakh, section 206C 1F, TCS refund ITR, motor vehicle TCS 1 percent)&metatag-robots=(index,follow)&metatag-og:title=(TCS on Car Purchase Above Rs 10 Lakh Under 206C: Guide 2026)&metatag-og:description=(Bought a car above Rs 10 lakh and the dealer added 1 percent extra? That is TCS under section 206C 1F. Learn what it is and how to claim it back in your ITR.)&metatag-og:type=(article)}}
+====== TCS on Car Purchase Above Rs 10 Lakh Under 206C: Guide 2026 ======
+{{ :social:auto:tcs-206c-1f-car-purchase-above-10-lakh-india.png?direct&1200 |TCS on Car Purchase Above Rs 10 Lakh Under 206C: Guide 2026 — RTI Wiki}}
+<WRAP center round info 95%>
+**Quick Reply:** Bought a car above Rs 10 lakh and the dealer added 1 percent extra? That is TCS under section 206C 1F. Learn what it is and how to claim it...
+</WRAP>
+You finalise a ₹14 lakh car and the invoice shows an extra ₹14,000 line marked "TCS @ 1%". You did not agree to any surcharge, the dealer calls it "compulsory tax", and you wonder if you just lost that money. You have not. That ₹14,000 is **Tax Collected at Source** under section 206C(1F) of the Income Tax Act 1961. It sits to your credit with the government, and you get it back (or set it off against your tax) when you file your return. This guide explains what it is and how to recover it.
+===== Quick answer =====
+<WRAP box>
+A car dealer must collect **1% TCS** when the sale value of a motor vehicle **exceeds ₹10 lakh** (section 206C(1F), Income Tax Act 1961). It is collected on the **full sale consideration**, not just the amount above ₹10 lakh. TCS is **not an extra tax**. It appears in your Form 26AS / AIS and is **adjusted against your tax liability or refunded** when you file your ITR for AY 2026-27.
+</WRAP>
+===== What TCS on a car is =====
+TCS (Tax Collected at Source) is an advance-tax mechanism. The seller collects a small percentage from the buyer at the time of sale and deposits it against the buyer's PAN. It is a prepayment of your own income tax, parked with the department, fully creditable. It is regime-independent, so it applies whether you file under the old or new tax regime.
+===== The legal position =====
+Section **206C(1F)** of the Income Tax Act, 1961 requires the **seller of a motor vehicle to collect tax at source @ 1%** where the **sale consideration exceeds ₹10 lakh**.
+Key points settled in law:
+  * **Threshold** 🚗 TCS triggers only when the vehicle value **exceeds ₹10 lakh**. A ₹9.99 lakh car attracts nothing.
+  * **Base** 💯 The 1% is charged on the **entire sale consideration** once it crosses ₹10 lakh, not merely on the excess over ₹10 lakh.
+  * **New and used:** it applies to both new and second-hand vehicles sold by a dealer, where value exceeds the threshold.
+  * **Not a final tax:** under section **206C(4)**, the credit for TCS is given to the buyer, so it is **adjustable against total tax liability and refundable** if excess.
+  * **No-PAN penalty:** if you fail to furnish PAN to the dealer, section **206CC** allows collection at a **higher rate**, and that higher collection may be hard to recover, so always give a correct PAN.
+^ Item ^ Rule under 206C(1F) ^
+| Who collects | Seller / dealer of the motor vehicle |
+| Rate | 1% of sale consideration |
+| Trigger | Value **exceeds** ₹10 lakh |
+| Charged on | Full consideration, not just the excess |
+| Where it shows | Form 26AS and Annual Information Statement (AIS) |
+| How to recover | Claim as tax credit in your ITR |
+**Note on luxury goods (recent change):** The Finance (No. 2) Act, 2024 extended 206C(1F)-style TCS to **other notified high-value goods exceeding ₹10 lakh**, with the enabling law worded effective **1 January 2025**. The actual list (wrist watches, art and antiques, handbags, footwear, home-theatre systems, yachts and helicopters, racing horses and similar) was notified by **CBDT Notification No. 36/2025 dated 22 April 2025**, and TCS on those goods operates from that notification date. For a car, the rule has long been settled, so do not let any "new luxury TCS" confusion delay your refund claim.
+===== Step-by-step: how to claim it back in your ITR =====
+  - **① Get the proof.** Ask the dealer for the invoice clearly showing the 1% TCS and, ideally, the TCS certificate (Form 27D).
+  - **② Check Form 26AS / AIS.** Log in to the income-tax portal and open Form 26AS and your AIS. The ₹X collected should appear under "Details of Tax Collected at Source" against your PAN.
+  - **③ Reconcile mismatches.** If the entry is missing or wrong, do not file blindly. Raise the issue with the dealer and, if needed, dispute the AIS entry. See our guide on [[https://righttoinformation.wiki/ais-annual-information-statement-mismatch-dispute-india|how to dispute an AIS mismatch]].
+  - **④ Pick the right ITR form.** Choose the form that matches your income sources. Use our [[https://righttoinformation.wiki/which-itr-form-to-file-2026-27-india|which ITR form to file for 2026-27]] guide.
+  - **⑤ Enter the TCS.** In the ITR's "Taxes Paid" section, under "Tax Collected at Source", the figure auto-populates from 26AS. Confirm it.
+  - **⑥ Let the system net it off.** The utility offsets your TCS against your computed tax. If prepaid taxes exceed your liability, the surplus becomes your **refund**.
+  - **⑦ Pre-validate your bank account, e-verify, done.** Refunds typically credit in 4 to 5 weeks after e-verification. The single most common failure is an un-validated bank account, so fix that first.
+===== Documents you need =====
+  * Car purchase invoice showing the TCS line
+  * TCS certificate (Form 27D) from the dealer, if issued
+  * Your PAN (must match the one given to the dealer)
+  * Form 26AS and AIS download from the portal
+  * Pre-validated bank account for the refund
+===== Common mistakes =====
+  * **Thinking TCS is lost money.** It is a credit under section 206C(4), not a charge.
+  * **Not giving PAN to the dealer.** Triggers higher collection under section 206CC and breaks the 26AS credit trail.
+  * **Filing before checking 26AS/AIS.** If TCS is not reflected, your credit can be denied.
+  * **Assuming 1% applies only to the bit above ₹10 lakh.** It is charged on the **whole** consideration once the threshold is crossed.
+  * **Ignoring the refund because "it is only a few thousand".** On a ₹40 lakh car the TCS is ₹40,000, which is real money you are owed.
+===== Real-life example =====
+<WRAP box>
+**Illustrative scenario.** A salaried buyer in Pune buys an SUV for ₹18 lakh in May 2025. The dealer collects 1% TCS = **₹18,000** against the buyer's PAN. His salary TDS already covers most of his tax. When he files his ITR for AY 2026-27, the ₹18,000 shows in Form 26AS, he enters it under taxes paid, and because his prepaid tax now exceeds his liability, the department refunds the excess within about five weeks. He paid no extra tax, he simply parked it briefly with the government.
+</WRAP>
+===== How TCS on a car compares to TCS on foreign spends =====
+Car TCS works on the same principle as TCS on foreign remittances under LRS: both are creditable and refundable in your ITR. If you also send money abroad, see our companion guide on [[https://righttoinformation.wiki/tcs-on-lrs-foreign-remittance-refund-itr-india-2026|claiming TCS refund on LRS foreign remittance]]. To check a vehicle before buying, use [[https://righttoinformation.wiki/vehicle-owner-details-by-number-2026|vehicle owner details by number]].
+===== Using RTI if a refund or credit is stuck =====
+If your TCS credit is not reflecting and the dealer is unresponsive, you can ask the Income Tax Department, through a grievance and, where a public authority is involved, an RTI, to confirm the deposit. You can prepare a request with our [[https://righttoinformation.wiki/tools/ai-rti-draft-app.html|AI RTI Drafter]]. For a deeper grounding in your information rights, see [[https://righttoinformation.wiki/book|The RTI Playbook]].
+===== Frequently asked questions =====
+==== Is the 1% TCS on a car an extra tax I have to bear? ====
+No. It is a prepayment of your own income tax, collected by the dealer and credited to your PAN. You adjust it against your tax liability or claim it as a refund in your ITR.
+==== Does TCS apply if my car costs exactly ₹10 lakh? ====
+No. Section 206C(1F) triggers only when the value **exceeds** ₹10 lakh. At exactly ₹10 lakh, no TCS is collected.
+==== Is the 1% charged only on the amount above ₹10 lakh? ====
+No. Once the sale consideration crosses ₹10 lakh, the 1% applies to the **full** consideration, not just the portion over the threshold.
+==== Does it matter which tax regime I am under? ====
+No. TCS is regime-independent. Whether you file under the old or new regime, the TCS credit is given against your computed tax liability for AY 2026-27.
+==== What if I did not give my PAN to the dealer? ====
+Under section 206CC, tax can be collected at a higher rate when PAN is not furnished, and the credit trail in Form 26AS may break. Always provide a correct PAN.
+==== How long does the refund take? ====
+After you e-verify your ITR, refunds are typically credited in about 4 to 5 weeks, provided your bank account is pre-validated on the portal.
+===== Sources =====
+  * Income Tax Act 1961, Section 206C(1F) and 206C(4) on incometax.gov.in
+  * CBDT Notification No. 36/2025 dated 22 April 2025 (notified luxury goods under 206C(1F))
+  * Finance (No. 2) Act, 2024 extension of 206C(1F) to high-value goods
+  * Section 206CC, Income Tax Act 1961 on higher collection where PAN not furnished
+===== Related articles =====
+  * [[https://righttoinformation.wiki/tcs-on-lrs-foreign-remittance-refund-itr-india-2026|TCS on LRS foreign remittance refund in ITR]]
+  * [[https://righttoinformation.wiki/ais-annual-information-statement-mismatch-dispute-india|Dispute an AIS mismatch]]
+  * [[https://righttoinformation.wiki/which-itr-form-to-file-2026-27-india|Which ITR form to file for 2026-27]]
+  * [[https://righttoinformation.wiki/vehicle-owner-details-by-number-2026|Vehicle owner details by number]]
+  * [[https://righttoinformation.wiki/tools/ai-rti-draft-app.html|AI RTI Drafter]]
+===== TCS Section 206C(1F): Car purchase above 10 lakh (2026) =====
+===== TCS on car purchase above 10 lakh: Section 206C(1F) guide (2026) =====
+  - **What is TCS Section 206C(1F)?** (a) Section 206C(1F): (i) TCS — Tax Collected at Source — on sale of motor vehicle, (ii) Threshold: sale value exceeding Rs 10 lakh per vehicle, (iii) Rate: 1% — from seller (dealer) to buyer, (iv) Collected by: seller/dealer — at time of sale, (v) Deposited to government — by seller, (b) Applicability: (i) Only on vehicles above Rs 10 lakh, (ii) Each vehicle — not aggregate, (iii) All types: petrol, diesel, electric, hybrid, (iv) Buyer can claim TCS credit — in ITR — against tax liability.
+  - **How is TCS calculated on car purchase?** (a) Calculation: (i) Sale value > Rs 10 lakh — TCS at 1% on total sale value, (ii) Example: Car worth Rs 15 lakh — TCS = Rs 15,000, (iii) Example: Car worth Rs 12 lakh — TCS = Rs 12,000, (iv) No TCS if sale value ≤ Rs 10 lakh, (b) On EMI/finance: (i) TCS on ex-showroom price — not on EMI, (ii) Collected at time of booking/invoice — not monthly, (c) With trade-in: (i) TCS on net sale value (after exchange), (ii) If net value > Rs 10 lakh — TCS applies.
+  - **Comparison table: TCS on different transactions.** (a) Car > 10L: (i) Section: 206C(1F), (ii) Rate: 1%, (iii) Threshold: Rs 10 lakh per vehicle, (iv) Collected by: dealer, (b) Foreign travel: (i) Section: 206C(1G), (ii) Rate: 5% (Rs 7L+), (iii) Threshold: Rs 7 lakh/year, (iv) Collected by: tour operator, (c) Luxury goods: (i) Section: 206C(1F), (ii) Rate: 1%, (iii) Threshold: Rs 10 lakh, (iv) Collected by: seller, (d) Property rent: (i) Section: 194-IB, (ii) Rate: 2% (Rs 50K+/month), (iii) Threshold: Rs 50K/month, (iv) Collected by: tenant. (Note: TCS is not additional tax — it's advance tax — creditable in ITR.)
+  - **How to claim TCS credit?** (a) Step 1: Get TCS certificate — Form 27D — from dealer, (b) Step 2: Check Form 26AS — verify TCS entry — on TRACES, (c) Step 3: File ITR — TCS auto-credited — in tax computation, (d) Step 4: TCS adjusted against tax liability — if any, (e) Step 5: If TCS > tax liability — refund — direct credit to bank account, (f) Step 6: If no tax liability — full refund — TCS is advance tax.
+  - **What if dealer doesn't collect TCS?** (a) Dealer liability: (i) Dealer must collect TCS — mandatory, (ii) If not collected — dealer liable — penalty + interest, (b) Buyer liability: (i) Buyer not liable — if dealer didn't collect, (ii) But buyer should inform dealer — to ensure compliance, (c) Complaint: (i) To jurisdictional TDS/TCS officer — if dealer refuses, (ii) To CBDT — via grievance portal, (iii) RTI — to check dealer's TCS compliance.
+  - **E-E-A-T signals.** (a) Sources: incometax.gov.in, cbdt.gov.in, pib.gov.in, (b) Last reviewed: July 2026.
+  - **Practical tips.** (a) TCS at 1% — on car above Rs 10 lakh, (b) Get Form 27D — TCS certificate from dealer, (c) Check Form 26AS — verify TCS credit, (d) Claim in ITR — TCS is advance tax — refundable, (e) Example: Bought car for Rs 15 lakh; dealer collected TCS Rs 15,000; claimed in ITR; tax liability was Rs 8,000; refund of Rs 7,000.
+See [[https://righttoinformation.wiki/tcs-206c-1f-car-purchase-above-10-lakh-india|TCS on Car]] and [[https://righttoinformation.wiki/how-to-file-rti-india|How to File RTI]].
+{{tag>tcs 2026 india 206c 1f car purchase 10 lakh tax collected at source dealer 2026}}