Buying a car on Dhanteras, Diwali 2026? You could get at least ₹10,000 as tax refund next year — here's how

Festive Vehicle Purchases And TCS

Vehicle purchases made around Dhanteras and Diwali can carry a tax consequence that buyers often overlook. Where the sale value of a motor vehicle exceeds ₹10 lakh, the dealer collects tax collected at source (TCS) at 1% of the consideration. The amount is deposited against the buyer's Permanent Account Number and is not an extra cost, but tax paid in advance that can be claimed as a credit.

Why The Credit Matters

The provision exists so the tax department can track high-value vehicle transactions. For buyers, the practical effect is a cash-flow event: money leaves at the point of sale and returns later, either as a reduction in tax payable or as a refund. A vehicle priced at ₹20 lakh, for instance, would attract roughly ₹20,000 as TCS, which the buyer may be able to recover.

The refund route depends on the taxpayer's overall liability for the financial year of purchase. Where total tax liability exceeds the TCS collected, the credit is adjusted against dues. Where liability is lower or nil, the excess can be claimed as a refund, credited to a pre-validated bank account after processing.

Steps To Claim The Credit

Buyers should obtain Form 27D, the TCS certificate, from the dealer and confirm that the PAN, the amount collected and the collection date are correct. The certificate can also be downloaded from the TRACES portal if the dealer has not issued one.

Before filing, taxpayers should log in to the income tax e-filing portal and verify that the credit appears in Form 26AS or the Annual Information Statement. If it is missing, the dealer should be approached before the return is filed.

The return for the relevant financial year must reflect the TCS amount shown in Form 26AS or AIS, and the claim should be checked before submission and e-verification. Refund status can be tracked through the e-filing portal.

What To Watch

The credit is only as good as the reporting behind it. Mismatches between dealer filings and the buye…