TCS Now Applicable on High-Value Luxury Goods: CBDT Notifies New Rule for Items Above ₹10 Lakh
The Central Board of Direct Taxes (CBDT) has issued Notification No. 36/2025 dated April 22, 2025, mandating Tax Collection at Source (TCS) on the sale of luxury goods exceeding ₹10 lakh in value. The provision comes into effect from the date of its publication in the Official Gazette.
Under the authority granted by Section 206C(1F)(ii) of the Income-tax Act, 1961, the Central Government has identified the following high-value goods for mandatory TCS:
List of High-Value Goods Subject to TCS:
- Wristwatches
- Art pieces (including antiques, paintings, sculptures)
- Collectibles (such as coins, stamps)
- Yachts, rowing boats, canoes, helicopters
- Sunglasses
- Bags (handbags, purses)
- Luxury shoes
- Premium sportswear and equipment (e.g., golf kits, ski-wear)
- Home theatre systems
- Horses for racing or polo
Key Highlights:
TCS applies only when the value of goods exceeds ₹10 lakh.
Sellers are required to collect tax at source from buyers at the applicable rate under Section 206C.
This amendment ensures transparency in high-value transactions and enhances tax reporting and compliance.
Impact on Businesses and Buyers:
This notification is expected to impact retailers and dealers of luxury goods, as they must now implement TCS provisions into their billing and reporting systems. Buyers, especially high-net-worth individuals (HNWIs), should be aware that such purchases will be reflected in their Form 26AS and may influence future income tax scrutiny.
