For those looking to buy a designer handbag, a luxury watch, or another high-end item, you might want to buckle up for an additional cost. The Income Tax department announced a 1% Tax Collected at Source (TCS) on luxury goods worth over ₹10 lakh. Let’s dive into what this means for luxury shoppers and other details in this article.
1% TCS Imposed On High-End Goods
The government has announced a 1% Tax Collected at Source (TCS) on luxury goods worth over ₹10 lakh, effective April 22, 2025. This move reportedly aims to expand the taxpayer base and ensure accurate income disclosures.
CBDT Notification Alert!
New rules issued for Tax Collection at Source (TCS) on the purchase of certain goods.
Notification S.O. 1825(E) dated 22.04.2025 published in https://t.co/wgrnm5QBDw
The Notification can be accessed at:https://t.co/6GAXN2t5RS pic.twitter.com/zoRIH6NkXd
— Income Tax India (@IncomeTaxIndia) April 23, 2025
A-List of Luxury Goods Included In The 1% TCS
The following luxury goods are subject to the 1% TCS:
- Wrist Watches: High-end watches from esteemed brands like Rolex, Omega, and Patek Philippe
- Art Pieces: Antiques, paintings, sculptures, and other art collectibles
- Collectibles: Coins, stamps, and other rare collectibles
- Yachts and Helicopters: Luxury watercraft and aircraft
- Sunglasses: High-end sunglasses from designer brands
- Handbags and Purses: Luxury handbags from brands like Louis Vuitton, Chanel, and Gucci
- Shoes: High-end footwear from designer brands
- Sportswear and Equipment: Golf kits, ski gear, and other high-end sportswear
- Home Theatre Systems: High-end home entertainment systems
- Horses for Racing and Polo: Horses bred for racing and polo games
How Will TCS Work For Luxury Goods?
Sellers will collect 1% TCS from the buyer upon purchase of luxury goods worth over ₹10 lakhs. This amount will be calculated on the sale price and adjusted against the buyer’s total income tax liability when filing returns.
Implications For Luxury Shoppers
Buyers can expect:
- Enhanced Know Your Customer (KYC) Requirements
- Updated PAN Details For TCS Compliance
- TCS Reflected in Form 26AS
- Retention Of Purchase Receipts
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