India’s Central Board of Direct Taxes (CBDT) has issued Notifications No. 35/2025 and 36/2025, on 22 April 2025, expanding the scope of the 1% Tax Collected at Source (TCS) on high-value luxury goods.
The updated scope now includes wristwatches, artworks (including antiques and sculptures), collectibles (like coins and stamps), sunglasses, bags, shoes, yachts and boats, helicopters, sportswear and equipment, home theatre systems, and horses used in racing or polo.
Under the new rules, sellers must collect 1% TCS at the time of receiving payment if a single transaction for specified goods exceeds INR 1 million.
The updated provision, effective from 22 April 2025, is issued under Section 206C(1F) of the Income Tax Act, 1961. It applies to individual transactions only—meaning TCS will not be required if each purchase remains below INR 10 lakh, even if the total annual spending exceeds that threshold.
To assist with implementation, the CBDT has also released a set of FAQs under Notification No. 36/2025.
