New Delhi, June 21 -- Planning to buy a car? If the vehicle's price exceeds Rs. 10 lakh, it is important to understand how Tax Collected at Source (TCS) works and how you can claim a refund, if eligible. TCS on car purchases is governed by Section 206C(1F) of the Income Tax Act, 1961. Before exploring the refund process, let's first understand what TCS means and how it applies to vehicle purchases.

Tax Collected at Source (TCS) is a tax that a seller collects from a buyer at the time of a specified transaction. Under Section 206C of the Income Tax Act, the seller is required to collect a prescribed percentage of the transaction value and deposit it with the government.

The tax is collected at the earlier of two events: when the buyer's ...