Purchasing a car worth more than Rs 10 lakh attracts Tax Collected at Source (TCS), a provision under Section 206C of the Income Tax Act, 1961. This tax, collected by the seller (usually the car dealer), is 1% of the car's sale price. The TCS is an advance tax payment by the buyer, and the seller must deposit it with the government within a specified timeframe. As a buyer, it's crucial to verify that the TCS has been accurately recorded against your Permanent Account Number (PAN) to claim credit while filing your Income Tax Return (ITR).
Understanding TCS on Car Purchases
TCS is applicable when the ex-showroom price of the car exceeds ₹10 lakh. The car dealer collects TCS at the time of sale or invoice generation. The collected amount is then deposited with the Income Tax Department under the buyer's PAN. TCS aims to track high-value transactions, minimize tax evasion, and ensure timely tax collection.
For example, if you purchase a car for Rs 15 lakh, the TCS amount would be Rs 15,000 (1% of Rs 15 lakh). This amount is added to your total bill during the purchase.
How to Check If Your TCS Was Recorded
To ensure that the TCS you paid has been correctly recorded, follow these steps:
- Obtain Form 27D: The seller is responsible for providing you with Form 27D, which serves as the TCS certificate. This certificate contains details such as the names of the buyer and seller, the amount of tax collected, and the date of tax collection. If you don't have Form 27D, you can request it from the car seller or download it from the TRACES portal.
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Verify TCS Details in Form 26AS: Form 26AS is a tax credit statement that shows the taxes deducted or collected from your income. You can access it through the Income Tax e-filing portal:
- Log in to the official Income Tax e-filing portal using your PAN as the user ID.
- Navigate to "View Form 26AS".
- Confirm that the TCS details from Form 27D are correctly reflected in Form 26AS. Ensure the following details are accurate:
- Dealer's Tax Deduction and Collection Account Number (TAN).
- Date and amount of TCS collected.
- Transaction type and your PAN.
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File Your Income Tax Return (ITR): To claim the TCS benefit, you must file your ITR.
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Choose the appropriate ITR form based on your income sources.
- Report the TCS amount in the "Taxes Paid" section of your ITR.
- Enter the TCS amount under the "TCS" column in your ITR. The system will automatically calculate your refund amount.
- Make sure to double-check all entries for accuracy before submitting your ITR electronically through the income tax portal.
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Track Your Refund Status: After filing your ITR, you can track your refund status on the Income Tax portal.
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Go to the e-file tab, select "Income Tax Returns," and click "View Filed Returns".
- Here, you can check the refund status for the desired assessment year. The status will indicate whether the refund has been issued, partially issued, or adjusted by the department.
Claiming TCS Refund
You are eligible to claim the TCS if the seller deducted it when you purchased the car, and the car's ex-showroom price was more than Rs 10 lakh. The TCS amount can be claimed while filing your income tax return.
To claim the refund, you will need the car purchase invoice reflecting the TCS amount and your Form 26AS. This form confirms that the seller has deposited the TCS against your PAN. When filing your ITR, you can claim the TCS amount deducted under the relevant head in the ITR form. If your total tax liability for the financial year is less than the TCS amount paid, you are eligible to receive a refund of the TCS amount in your PAN-linked bank account.
By following these steps, you can ensure that your TCS is correctly recorded and that you can claim the appropriate credit or refund when filing your income tax return.
