New Delhi, July 13 -- Buying a car worth over Rs.10 lakh attracts an additional tax. Dealers collect a TCS of 1% from buyers and deposit it with the Income Tax Department.

But it is important to know that TCS is treated as a tax credit. This means it can either reduce your final income tax liability or be refunded after you file your Income Tax Return (ITR).

Car dealers and sellers are required to collect 1% TCS on the sale of a motor vehicle if its value exceeds Rs.10 lakh. The tax is collected from the buyer at the time of the transaction and deposited against the buyer's Permanent Account Number (PAN).

This provision applies to retail buyers and is intended to help the tax department track high-value purchases.

The TCS collected is...