<p>New Delhi: The Centre has decided to levy 1 per cent tax collected at source (TCS) on luxury goods like watches, handbags, purses, shoes, sunglasses and paintings costing above Rs 10 lakh, in order to curb tax evasion.</p><p>As per a notification issued by the Central Board of Direct Taxes (CBDT) the new tax is applicable from April 22.</p><p>The obligation to collect the tax will be on the seller. This means if you buy a handbag which costs more than Rs 10 lakh, then the seller will collect 1 per cent TCS on the purchase cost. This will give tax authorities nearly real-time information on high-value transactions.</p><p>"Effective April 22, 2025, the levy applies to notified products exceeding Rs 10 lakh in value with tax applicable on the full transaction amount," said Munjal Almoula, Head of Tax, BDO India.</p>.Global agencies cut GDP forecast to 6.2-6.7% in FY26; India to remain fastest growing economy.<p>"This move is a strategic step towards enhancing tax transparency and tracking high-value consumption trends, a move that aligns with global trends in tax surveillance and tax transparency," he added.</p><p>Items that will attract 1 per cent TCS include wrist watches, art objects such as paintings, sculptures, and antiques, collectibles such as coins and stamps, yachts, rowing boat, helicopters, luxury handbags, sunglasses, footwear, sportswear and equipment such as gold kit, home theatre system, and horses intended for racing or polo.</p><p>The announcement for levy of TCS on high-value transactions was made by Finance Minister Nirmala Sitharaman in July 2024 Union Budget. The minister had proposed to make the levy effective from January 1, 2025.</p><p>While the 1 per cent TCS was made applicable on motor vehicles priced above Rs 10 lakh with effect from January this year. The Finance Act, 2024 stated that a seller of a motor vehicle priced above Rs 10 lakh or any other goods, as may be specified by the Central government by notification, will have to collect a 1 per cent TCS from the buyer on the sale consideration as income tax.</p><p>The CBDT issued the notification for new items dated April 22. “This notification shall come into force on the date of its publication in the Official Gazette,” it said.</p><p>It will be the responsibility of the sellers to collect and deposit the TCS amount with the tax authorities. The amount needs to be deposited against the buyer’s permanent account number (PAN). It works like tax deducted at source (TDS) on salary. TCS will be reflected in Form 26AS. A taxpayer can claim a refund if the tax liability is lower than the tax collected.</p>
<p>New Delhi: The Centre has decided to levy 1 per cent tax collected at source (TCS) on luxury goods like watches, handbags, purses, shoes, sunglasses and paintings costing above Rs 10 lakh, in order to curb tax evasion.</p><p>As per a notification issued by the Central Board of Direct Taxes (CBDT) the new tax is applicable from April 22.</p><p>The obligation to collect the tax will be on the seller. This means if you buy a handbag which costs more than Rs 10 lakh, then the seller will collect 1 per cent TCS on the purchase cost. This will give tax authorities nearly real-time information on high-value transactions.</p><p>"Effective April 22, 2025, the levy applies to notified products exceeding Rs 10 lakh in value with tax applicable on the full transaction amount," said Munjal Almoula, Head of Tax, BDO India.</p>.Global agencies cut GDP forecast to 6.2-6.7% in FY26; India to remain fastest growing economy.<p>"This move is a strategic step towards enhancing tax transparency and tracking high-value consumption trends, a move that aligns with global trends in tax surveillance and tax transparency," he added.</p><p>Items that will attract 1 per cent TCS include wrist watches, art objects such as paintings, sculptures, and antiques, collectibles such as coins and stamps, yachts, rowing boat, helicopters, luxury handbags, sunglasses, footwear, sportswear and equipment such as gold kit, home theatre system, and horses intended for racing or polo.</p><p>The announcement for levy of TCS on high-value transactions was made by Finance Minister Nirmala Sitharaman in July 2024 Union Budget. The minister had proposed to make the levy effective from January 1, 2025.</p><p>While the 1 per cent TCS was made applicable on motor vehicles priced above Rs 10 lakh with effect from January this year. The Finance Act, 2024 stated that a seller of a motor vehicle priced above Rs 10 lakh or any other goods, as may be specified by the Central government by notification, will have to collect a 1 per cent TCS from the buyer on the sale consideration as income tax.</p><p>The CBDT issued the notification for new items dated April 22. “This notification shall come into force on the date of its publication in the Official Gazette,” it said.</p><p>It will be the responsibility of the sellers to collect and deposit the TCS amount with the tax authorities. The amount needs to be deposited against the buyer’s permanent account number (PAN). It works like tax deducted at source (TDS) on salary. TCS will be reflected in Form 26AS. A taxpayer can claim a refund if the tax liability is lower than the tax collected.</p>