CBDT Notifies New TDS Rules for Sale of Luxury Items in 2025
By Author | April 23, 2025 | CBDT Notification & Income Tax Updates
The Central Board of Direct Taxes (CBDT) has released Notification No. 35/2025, dated April 22, 2025. This update introduces new TDS and TCS rules for the sale of luxury items under the Income-tax (Eleventh Amendment) Rules, 2025.
These changes amend the Income-tax Rules, 1962, aiming to strengthen compliance and increase revenue from high-end consumer goods.
🛍️ Luxury Items Now Under TCS Provisions
According to the new rule, TCS under Section 206C of the Income-tax Act, 1961 will apply when sellers deal with the following luxury items:
- Wristwatches
- Artworks (antiques, paintings, sculptures)
- Collectibles (coins, stamps)
- Yachts, helicopters, canoes, and boats
- Sunglasses
- Handbags and purses
- Designer shoes
- Premium sports gear (e.g., golf kits, ski wear)
- Home theatre systems
- Racing or polo horses
💡 These items must be reported using Form 27EQ. The rule takes effect from the date it’s published in the Official Gazette.
🧾 What Sellers Must Do
Sellers must immediately update their billing and accounting software. They should also train their teams to collect TCS at the correct rates. These transactions must now be recorded and reported accurately to the tax department.
📌 What Buyers Should Know
Buyers should keep in mind that their luxury purchases will now reflect in their PAN-linked tax records. Consequently, these transactions might affect future tax scrutiny or assessments.
✅ Key Takeaways
This notification ensures:
- Better tracking of luxury expenses
- Increased transparency in tax reporting
- Stronger compliance among luxury retailers and buyers
If you’re a business owner, review your sales process immediately. If you’re a buyer, stay informed and keep track of your high-value purchases.
