New Delhi, July 19 -- Buying a car is a major expense but many buyers don't realise they may be entitled to an income tax refund on the purchase. If the vehicle's value exceeds the prescribed limit, the dealer collects 1% TCS (tax collected at source) at the time of sale. This is not a extra charge but rather tax paid in advance.

The good news is that this amount is not lost. When you file your income tax return (ITR), the TCS reflected against your PAN can be adjusted against your total tax liability. If your tax liability is lower than the TCS already collected, you can claim the excess amount as an income tax refund.

Car dealers and sellers are required to deduct 1% TCS on the sale of a motor vehicle if its ex-showroom value exceeds ...