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Luxurious items like purses, wrist watches, footwear, and sportswear, priced above ₹10 lakh will now entice a 1% tax collected at supply (TCS).

The Revenue Tax Division has notified the applicability of TCS on the charge of 1% on sale of specified luxurious items, the place the promoting value exceeds ₹10 lakh with impact from April 22, 2025.

The TCS provision for luxurious items was launched through Finance Act, 2024, as a part of the Price range offered in July, 2024.

The duty to gather TCS shall be on the vendor in respect of the notified items reminiscent of wrist watch, artwork objects reminiscent of work, sculptures, and antiques, collectible gadgets together with cash and stamps, yachts, helicopters, luxurious purses, sun shades, footwear, high-end sportswear and gear, house theatre programs, and horses meant for racing or polo.

Nangia Andersen LLP Tax Companion Sandeep Jhunjhunwala, mentioned this notification operationalises the Authorities’s intent to reinforce monitoring of high-value discretionary expenditure and strengthen the audit path within the luxurious items section.

It displays a broader coverage goal of increasing the tax base and selling larger monetary transparency.

“Sellers will now be required to make sure well timed compliance with TCS provisions, whereas consumers of notified luxurious items might expertise enhanced KYC necessities and documentation on the time of buy.

“Though the posh items sector might endure some transitional challenges, this measure is anticipated to advertise formalisation and improved regulatory oversight over time,” Mr. Jhunjhunwala added.