Starting from April 22, 2025, a new rule mandates that a 1 per cent Tax Collected at Source (TCS) will be applied to luxury goods purchases exceeding Rs 10 lakh. Whether you’re buying a luxury bag, an expensive watch, branded shoes, or a golf kit, the seller will deduct 1 per cent TCS and deposit it against your PAN number.
This amount will appear in your Form 26AS and can be claimed as a tax credit when filing your Income Tax Return (ITR). If you have no tax liability, the deducted amount will be refunded to you.
TCS will apply to items priced above Rs 10 lakh, including watches (wristwatches), art pieces (antiques, paintings, sculptures), collectibles (coins, stamps), yachts, helicopters, boats (rowing boats, canoes), sunglasses, handbags, wallets, shoes, sports gear (like golf kits and ski wear), home theatre systems, and horses used for racing or polo.
If you purchase any of the listed luxury items worth over Rs 10 lakh, the seller will collect 1 per cent TCS and deposit it using your PAN. This deducted amount will appear in your Form 26AS, and you can claim it as a tax credit when filing your ITR. If you don’t have any tax dues, the amount will be refunded to you.
If you don’t share your PAN, the TCS rate could shoot up to 20 per cent, according to media reports. That means a Rs 10 lakh purchase might cost you an extra Rs 2 lakh in tax alone. While there’s no official confirmation from the government yet, the move is said to help curb untracked or anonymous transactions.
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