Coaltar S Lotion is used on the skin to treat the itching, scaling, and flaking due to skin conditions such as psoriasis or seborrheic dermatitis. Coal tar belongs to a class of drugs that has keratoplastics property. It acts by causing the skin to shed dead cells from its top layer and reduce the growth of skin cells. This effect decreases scaling and dryness. It has can also reduce itchiness from these skin conditions.