The Central Board of Direct Taxes (CBDT), vide Notification No. G.S.R. 252(E) dated 22nd April 2025, has brought ten categories of luxury goods under the ambit of Tax Collected at Source (TCS) under Section 206C(1F) of the Income-tax Act, 1961. This has been done through the Income-tax (11th Amendment) Rules, 2025, with immediate effect.
This move is aligned with the Government’s policy of monitoring high-value discretionary spending and widening the tax net.
Legal Provision – Section 206C(1F)
Section 206C(1F) mandates collection of tax at source @1% by the seller if the sale consideration received from a buyer for a notified item exceeds ₹10,00,000 per transaction. In the absence of PAN/Aadhaar, Section 206CC will apply, increasing the TCS rate to 5%.
Earlier applicable only to motor vehicles, the list of notified goods has now been expanded.
Newly Notified Goods under Form 27EQ
| Sl. No. | Luxury Good Category | Code | Threshold (₹) | TCS Rate (with PAN) | TCS Rate (w/o PAN) |
|---|---|---|---|---|---|
| 1 | Wristwatch | 6CMA | 10,00,000 | 1% | 5% |
| 2 | Art pieces (e.g., painting, sculpture, antique) | 6CMB | 10,00,000 | 1% | 5% |
| 3 | Collectibles (e.g., coins, stamps) | 6CMC | 10,00,000 | 1% | 5% |
| 4 | Yacht, canoe, rowing boat, helicopter | 6CMD | 10,00,000 | 1% | 5% |
| 5 | Sunglasses (per pair) | 6CME | 10,00,000 | 1% | 5% |
| 6 | Handbag, purse | 6CMF | 10,00,000 | 1% | 5% |
| 7 | Shoes (per pair) | 6CMG | 10,00,000 | 1% | 5% |
| 8 | Sportswear or equipment (e.g., golf kit, ski-wear) | 6CMH | 10,00,000 | 1% | 5% |
| 9 | Home theatre system | 6CMI | 10,00,000 | 1% | 5% |
| 10 | Horse (used for horse racing or polo) | 6CMJ | 10,00,000 | 1% | 5% |
TCS is applicable even when goods are purchased for personal use.
Practical & Compliance Insights
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The ₹10 lakh threshold applies per transaction, per item. Splitting bills may not prevent TCS applicability.
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TCS is collected at the time of receipt of consideration.
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Applicable to sellers in India, including online and offline retailers, auctioneers, and private dealers.
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Buyers must ensure PAN/Aadhaar is provided to avoid higher deduction.
Regulatory References
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Notification No. G.S.R. 252(E), dated 22nd April 2025
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Legal Authority: Section 206C(1F), read with Section 295
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Form Amended: Form 27EQ – Notes to Annexure
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Effective Date: From date of publication in Official Gazette
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Issued by: Ministry of Finance, CBDT
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F. No.: 370142/11/2025-TPL
Conclusion
This expansion of Section 206C(1F) marks a significant compliance shift for high-end retailers and consumers of luxury goods. Stakeholders should ensure immediate alignment with the new rules to avoid penalty under Section 271CA or prosecution under Section 276BB.
