But if you pay Rs.20 lakh in one go, the tax will be collected on the paid amount immediately. For instance, if your car is worth Rs.20 lakh and you make payment in instalments—at the time of booking you pay Rs.5 lakh, and at the time of delivery you pay Rs.15 lakh. Let us assume the value of your motor vehicle is Rs.20 lakh, out of which you pay Rs.5 lakh in cash and the remaining Rs.15 lakh is paid using a cheque. Moreover, if you buy a car costing between Rs.2 lakh and Rs.10 lakh, and pay by cash, you will have to pay 1% as TCS. You will have to pay 1% tax on the total sale consideration of Rs.20 lakh, i.e., Rs.20,000.

Source: Mint June 12, 2016 18:45 UTC