Luxury Goods Over Rs 10 Lakh to Attract 1% TCS from April 22

New Delhi, April 23 – The Income Tax Department has notified that luxury items such as handbags, wristwatches, shoes, and sportswear priced above Rs 10 lakh will now be subject to a 1 percent Tax Collected at Source (TCS). The new rule came into effect on April 22, 2025.

As per agency report, this provision was introduced as part of the Finance Act 2024, following the Union Budget presented in July 2024. The TCS is applicable to specific high-value discretionary items and is aimed at enhancing oversight on luxury spending.

The responsibility to collect TCS lies with the seller, and it applies to notified goods including luxury handbags, sunglasses, high-end footwear, home theatre systems, sports apparel and equipment, yachts, helicopters, art pieces like paintings and sculptures, collectible items such as coins and stamps, and even horses used for racing or polo.

Tax partner at Nangia Andersen LLP, Sandeep Jhunjhunwala, remarked that this move reflects the government’s intent to tighten audit norms and increase scrutiny on high-value discretionary expenditure. He added that the TCS provision supports the broader policy goal of expanding the tax base and fostering greater financial transparency.