The Income Tax Department has announced that the purchases of these items will now attract taxes raised in the source, along with the tax collected in motor vehicles. | Photo credit: Murali Kumar K
Do you plan to buy a wristwatch, sunglasses, bags, wallets, a pair or shoes or a home film system with a sale price of ₹ 10 Lakh or more? Prepare to pay more.
The Income Tax Department has announced that the purchases of these items will now attract taxes collected at the source (TCS), along with the tax raised in motor vehicles.
In a recent notification, the Income Tax Department has listed 10 types of goods that require ₹ 10 Lakh in value for TCS collection. These include: bracelet watches; Art pieces such as antiques, paintings, sculptures; collectibles such as coins and stamps; Yates, rowing ships, canoes, helicopters; sunglasses; Bags such as bags and wallets; Shoes; Sportswear and equipment such as golf kit, ski clothes; Home film systems; And horses used in horse races in racing clubs or pole.
“This notification will enter into force on the date of its publication in the Official Gazette,” he said. This means that TCS will be applicable as of April 22.
What is TCS, TDS?
The TCS together with TDS (taxes deducted at the source) are fundamental components of Indian taxes. TDS repeats the tax deduced from payments made when the amount exceeds an established limit.
On the contrary, TCS refers to the taxes collected by the transactions of sellers with buyers.
Both operate at the source of income or transactions and are proactive measures to optimize tax administration in the country.
TDS covers payments such as rent, salaries, interests and others. TCS covers the sale of products such as luxury items, cars on a certain value, etc.
Section 206c amended
In another notification, the IT department has included the 10 assets mentioned above to form 27EQ (Quarter Tax Collection Declaration at the source to be submitted). This update follows the row relationship with “Collection at the source in the sale of motor vehicles.” These two notifications are aimed at implementing amendments to section 206 C of the Income Tax Law, introduced through the Finance Law (number 2) 2024.
Currently, section 206c of the law provides the collection of TCS in companies that are marketed in alcoholic liquors, forest products, waste, etc. Subsection (1F) specifies that each seller who receives any amount as a consideration for the sale of a motorized vehicle of the value greater than the ₹ 10 Lakh must collect 1 percent of the sale consideration as an income tax in the reception time. The amendment added this range to include “any other product, such as specific by the central government through notification in the official gazette” in addition to motor vehicles.
According to the Ministry of Finance, it has a bone so that there has been an increase in spending on luxury goods by people with high net floors. For proper monitoring of such expenses and to expand and deepen the fiscal network, the list of goods for TCS has been expanded.
Posted on April 23, 2025