Effective Date: April 22, 2025
Sellers are required to collect 1% Tax Collected at Source (TCS) on the sale of specified luxury goods with a sale value exceeding ₹10 lakh per item, as per the Central Board of Direct Taxes (CBDT) Notification S.O. 1825(E).
Luxury Goods Subject to 1% TCS
The following goods are covered if their individual sale value exceeds ₹10 lakh:
- Wrist Watches ⌚
- Art Pieces 🎨 (e.g., antiques, paintings, sculptures)
- Collectibles 🪙 (e.g., coins, stamps)
- Recreational Vehicles 🚤 (e.g., yachts, rowing boats, canoes, helicopters)
- Sunglasses 🕶️
- Bags 👜 (e.g., handbags, purses)
- Shoes 👟
- Sportswear & Equipment 🎿 (e.g., golf kits, ski-wear)
- Home Theatre Systems 📽️
- Horses 🐎 (e.g., for racing or polo)
Key Compliance Notes
Buyer Benefit: Buyers can claim TCS as a credit in their Income Tax Return (ITR).
TCS Rate: 1% of the sales consideration. If the buyer does not provide PAN/Aadhaar, the rate increases to 5%.
Applicability: Applies to consumer sales, not sales to dealers or distributors.
Deposit & Reporting: Sellers must deposit TCS by the 7th of the following month and file quarterly TCS returns (Form 27EQ).