Tax Alert: Wristwatches, Yachts, and More Now Under TCS Net

Luxury now comes with a tax tag! From yachts to wristwatches, the CBDT casts a wider net under TCS rules—find out what’s new in your sales ledger.

The Central Board of Direct Taxes (CBDT) has issued a significant notification that mandates the collection of Tax Collected at Source (TCS) at the rate of 1% on the sale of certain high-end luxury goods, if the value of such goods exceeds ₹10 lakh in a single transaction. This change is set to come into force from April 22, 2025, and is a part of the government’s broader initiative to monitor large-scale consumption and enhance transparency in high-value transactions.

Key Highlights of the Notification:

As per the amended rules, a new set of items have been added to Form No. 27EQ under Note 11, detailing scenarios where TCS must be collected. These include high-end consumer goods and luxury items, expanding the scope of tax compliance. The new items added are:

Section	Description	Code
206C	Collection at source on sale of wrist watch	MA
206C	Collection at source on sale of art piece such as antiques, painting, sculpture	MB
206C	Collection at source on sale of collectibles such as coin, stamp	MC
206C	Collection at source on sale of yacht, rowing boat, canoe, helicopter	MD
206C	Collection at source on sale of pair of sunglasses	ME
206C	Collection at source on sale of bag such as handbag, purse	MF
206C	Collection at source on sale of pair of shoes	MG
206C	Collection at source on sale of sportswear and equipment such as golf kit, ski-wear	MH
206C	Collection at source on sale of home theatre system	MI
206C	Collection at source on sale of horse for horse racing in race clubs and horse for polo	MJ

Implications for Sellers and Buyers

This amendment is aimed at enhancing transparency in high-value transactions and ensuring better tax compliance. Sellers dealing in these specified goods are now required to collect tax at source from buyers at the prescribed rate under section 206C.

The categorization and allocation of specific codes (MA to MJ) for each item will aid in easier reporting and data analysis for the Income Tax Department.

We hope the above blog was helpful in enhancing your knowledge on the matter. In case of any queries feel free to get in touch with our team of experts.