Taxpayers Will Have to Pay 1% TCS on Luxury Goods Above Rs 10 lakh; Income Tax dept Notification

Buyers of luxury items priced over Rs 10 lakh—such as wristwatches, handbags, antiques, paintings, sculptures, sunglasses, home theatre systems, shoes, sportswear and more—will pay a 1% Tax Collected at Source (TS) when they buy these goods, the Income Tax Department announced on April 22.

Although this measure was introduced in the July 2024 Budget and set to start January 1, 2025, the department has now specified which items fall under the rule. The aim is to help tax authorities track high‑value purchases and match them with taxpayers’ income profiles to curb evasion.

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The 1% TCS on these luxury items applies only when the purchase amount exceeds the Rs 10 lakh threshold. This tax is charged under Section 206C of the Income Tax Act.

The TCS on luxury goods was first announced in the July 2024 Budget and was supposed to start on January 1, 2025.

Tax experts say this new levy will help bring more people into the tax system.

Currently, TCS is applied on the selling motor vehicles that cost over Rs 10 lakh.

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