Introduction
Buying a new car above ₹10 lakh?
Then here’s something most car buyers don’t know:
👉 The government actually owes you money — and you can claim it back.
This money is called TCS (Tax Collected at Source), and almost 70% of Indian buyers fail to claim the refund simply because they don’t know how the system works.
At the same time, if you own an old or unfit vehicle, scrapping it in 2026 is one of the smartest financial decisions you can make — thanks to the new scrappage ecosystem, cleaner mobility rules, and attractive benefits.
This guide covers both TCS Refund and Vehicle Scrapping in one simple, professional breakdown.
1. What Is TCS on New Cars Above ₹10 Lakh?
Any car dealer must collect 1% TCS on cars priced ₹10 lakh or above.
This applies to:
- Petrol & diesel cars
- SUVs
- EVs
- Company-registered vehicles
- Personal vehicles
Example
If your new car costs ₹15,00,000, the dealer collects:
TCS = 1% of 15,00,000 = ₹15,000
This amount is deposited to the govt under YOUR PAN.
Since it’s YOUR money, you can claim it as:
✔ Refund (if you have no tax liability)
✔ Adjustment (to reduce your tax payable)
2. How to Claim TCS Refund: Step-by-Step
Step 1: Check Your Form 26AS / AIS
Login to Income Tax Portal → My Account → Form 26AS
Here you will see:
- Dealer name
- Amount of TCS collected
- The exact refund eligibility
Step 2: File Your ITR
While filing your income tax return:
- Add the TCS amount under “Taxes Paid”
- The refund automatically gets calculated
Step 3: Refund Credited to Your Bank
Income Tax Department processes the refund directly to your bank account.
Important:
You cannot claim TCS at the dealership.
Refund comes only through ITR filing.
3. Why You Should Scrap Your Old Vehicle
India is pushing strongly towards the Vehicle Scrappage Policy, and 2026 will see stricter checks on:
- Fitness testing for older vehicles
- Increased penalties
- Higher re-registration fees
- Pollution compliance
If you own an old vehicle (especially 15+ years old petrol or 10+ years old diesel), scrapping it now has massive benefits.
4. Benefits of Scrapping Your Old Vehicle
1. Financial Benefits
- Scrap value payment (based on metal weight)
- Attractive discounts from manufacturers (usually 4–6%)
- Road tax concession (up to 25% for new car)
- Registration fee waiver
- No need for fitness test fees
2. Safety & Reliability
Old vehicles are more prone to:
- Brake failures
- Rusted frames
- Engine wear
- Poor crash protection
Scrapping removes these risks and promotes safer upgrading.
3. Environment-Friendly Choice
Old cars emit:
❌ 10x more pollution
❌ Lower fuel efficiency
❌ Higher particulate matter
Scrapping accelerates India’s clean mobility goals.
4. Legal Compliance
As rules tighten in 2026, the following will become costly:
- Fitness certificate failures
- Penalties for using old polluting vehicles
- Reregistration fees for >15-year vehicles
Scrapping avoids all of this.
5. TCS Refund + Vehicle Scrapping = Smartest Combo
When buying a new car above ₹10 lakh, you can double your savings:
✔ Save via TCS Refund
Take back your 1% tax paid — it's your right.
✔ Save via Scrappage Benefits
Earn scrap value + tax rebate + dealer discounts.
✔ Save via Reduced Maintenance**
Old vehicles drain money on:
- Engine repairs
- Clutch overhaul
- Suspension
- Insurance premiums
Scrapping removes unnecessary yearly costs.
✔ Completely Legal & Clean Upgrade
A new BS6 or EV comes with better safety, mileage, and technology.
6. Required Documents for Scrapping
If you’re scrapping your vehicle in 2026, keep these ready:
- RC (original or digital)
- Insurance (if available)
- Owner ID proof
- Vehicle photos
- Self-declaration form
- Bank details for payment
- Company documents (if corporate vehicle)
7. Frequently Asked Questions (FAQ)
Q1. Can I claim TCS refund if the car is bought in my company name?
Yes. Company can adjust or claim the refund in its ITR.
Q2. How long does it take to receive the TCS refund?
Usually 15–45 days after ITR is processed.
Q3. Is vehicle scrapping compulsory?
No, but old vehicles will face strict penalties, making scrapping the affordable option.
Q4. Do I get a certificate after scrapping?
Yes — you receive a Certificate of Disposal, which gives tax and dealer benefits.
Q5. Can I scrap a vehicle without RC?
Yes, with an undertaking + FIR for lost documents.
Q6. Are you (Carbasket) an Registered?
Yes — Carbasket is a registered company.
We connect you with verified scrapping partners and provide complete paperwork assistance.
8. Conclusion
If you’re buying a car above ₹10 lakh, remember:
💡 You are eligible for a TCS refund — claim what’s already yours!
💡 And if you own an old vehicle, scrapping it now is one of the smartest financial decisions.
You save on:
✔ Tax refund
✔ Scrap benefits
✔ New car rebates
✔ Pollution & penalty costs
✔ Repair expenses
An easy upgrade to a cleaner, safer, and more efficient vehicle.
