Outlook Business Desk
Starting April 22, 2025, a 1% TCS ( Tax collection rule) will be levied on luxury goods sold for over Rs 10 lakh, as per the Income Tax Department’s notification.
Luxury handbags, wristwatches, high-end footwear, designer sunglasses, art pieces, collectibles, yachts, helicopters, race or polo horses and home theatre systems are included.
Motor vehicles priced above Rs 10 lakh have been subject to TCS since early 2025, preceding this broader inclusion of luxury items.
Sellers collect 1% of the sale price as TCS at the time of purchase, with buyers needing to provide PAN details during the transaction.
TCS collected is not an additional tax, it is credited against the buyer’s total income tax liability when filing returns.
The government wants to track large purchases, increase the number of taxpayers and make luxury spending more transparent with this new rule.
Buyers should ensure PAN details are updated, keep purchase receipts and be ready for more KYC requirements at luxury outlets.
The collected TCS will appear in the buyer’s Form 26AS, aiding in accurate tax filing and ensuring transparency.