To widen the scope of Tax Collection at Source (TCS) and enhance revenue from high-value purchases, the Finance (No. 2) Act, 2024 amended Section 206C(1F) of the Income-tax Act, 1961. Previously applicable only to motor vehicles exceeding ₹10 lakh in value, this provision has now been expanded to include other notified luxury goods. In line with this, the Central Board of Direct Taxes (CBDT) issued Notification No. 36/2025 dated 22.04.2025, detailing the luxury goods now subject to TCS when sold for a consideration exceeding ₹10 lakh. The following FAQs aim to provide clarity to taxpayers and sellers on the amended scope and application of TCS under this section.
FAQ
Q.1 What changes were brought in section 206C(1F) of the Income Tax Act, 1961 through Finance (No. 2) Act, 2024?
Ans. Earlier, Section 206C(1F) provided for collection of tax at source (TCS) on sale of motor vehicle of value exceeding ten lakh rupees.
Vide Finance (No. 2) Act, 2024, section 206C(1F) was amended to provide that TCS will also be levied on any other goods of value exceeding ten lakh rupees, as may be notified by the Central Government in the Official gazette.
Q.2 Which are the luxury goods of value exceeding ten lakh rupees on which TCS will be levied?
Ans. Vide CBDT Notification No. 36/2025 dated 22.4.2025 SO 1825(E), the following goods of the value exceeding ten lakh rupees have been notified for collection of tax at source as specified in sub-section (1F) of section 206C of the Act –
| S. No | Nature of goods |
|---|---|
| 1 | any wrist watch |
| 2 | any art piece such as antiques, painting, sculpture |
| 3 | any collectibles such as coin, stamp |
| 4 | any yacht, rowing boats, canoes, helicopters |
| 5 | any pair of sunglasses |
| 6 | any bag such as handbag, purse |
| 7 | any pair of shoes |
| 8 | any sportswear and equipment such as golf kit, ski-wear |
| 9 | any home theatre system |
| 10 | any horse for horse racing in race clubs and horse for polo. |
Q.3 Whether TCS will be levied on sale of a single item of the notified goods of value exceeding ten lakh rupees?
Ans. Yes, TCS will be levied on sale of a single item of the goods of the nature specified in the above table which is of the value exceeding ten lakh rupees.
Q.4 When will the new provisions become effective?
Ans. The new provisions will become effective from the date of publication of notification i.e. 22.04.2025.
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