The tax department is now going to track high-value products above Rs 10 lakh such as luxury watches, art pieces, antiques, yachts, and collectibles by levying a 1% TCS on them. The department has expanded the scope of tax collected at source (TCS) framework and brought in more high-value goods under its purview.
The new luxury items brought under the purview of TCS include wrist watch, art objects such as paintings, sculptures, and antiques, collectible items including coins and stamps, yachts, helicopters, luxury handbags, sunglasses, footwear, high-end sportswear and equipment, home theatre systems, and horses intended for racing or polo. A notification in this regard was issued on Wednesday (April 22), effective immediately.
Tax collected at source (TCS) is levied on purchase of high-value goods in order to ensure buyers, who own these goods, do not escape from the tax net by under-reporting their income.
Amit Maheshwari, tax partner, AKM Global, says that by bringing more high-value items into the TCS framework, the government is widening the tax net beyond just motor vehicles. “This will enhance the traceability of luxury spending,” he said.
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