The Central Board of Direct Taxes (CBDT) has issued Notification No. 36/2025 dated 22nd April 2025, bringing important changes to the scope of Tax Collected at Source (TCS) under the Income-tax Act, 1961. With these changes, TCS will now apply not only to high-value motor vehicles but also to a broader range of luxury goods exceeding a value of Rs. 10 lakh. Understanding these amendments is crucial for sellers, buyers, and tax professionals to ensure smooth compliance with the updated law.
Here are some frequently asked questions (FAQs) to help you understand the key aspects of this notification:
What changes were brought to Section 206C(1F) of the Income-tax Act, 1961 through the Finance (No. 2) Act, 2024?
Previously, Section 206C(1F) mandated TCS on the sale of motor vehicles valued above Rs. 10 lakh.
The Finance (No. 2) Act, 2024 expanded the scope of this provision. Now, TCS will also be applicable on the sale of any other goods of value exceeding Rs. 10 lakh, as notified by the Central Government through an official notification.
Which luxury goods of value exceeding Rs. 10 lakh have been notified for TCS levy?
As per CBDT Notification No. 36/2025 dated 22nd April 2025 (SO 1825(E)), the following goods have been notified for TCS collection under Section 206C(1F):
| S. No | Nature of Goods |
| 1 | Any wrist watch |
| 2 | Any art piece such as antiques, paintings, sculptures |
| 3 | Any collectibles such as coins, stamps |
| 4 | Any yacht, rowing boat, canoe, helicopter |
| 5 | Any pair of sunglasses |
| 6 | Any bag such as a handbag or purse |
| 7 | Any pair of shoes |
| 8 | Any sportswear or equipment like golf kits, ski-wear |
| 9 | Any home theatre system |
| 10 | Any horse used for horse racing in race clubs or for polo |
Will TCS be levied on the sale of a single item of these notified goods exceeding Rs. 10 lakh?
Yes, TCS will apply to the sale of even a single item of any of the notified goods if its value exceeds Rs. 10 lakh. It is not necessary for the value of multiple items to cumulatively cross the threshold; a single high-value item triggers the TCS provision.
When will the new provisions become effective?
The provisions came into effect immediately upon publication of the notification, i.e., from 22nd April 2025. Sellers dealing in the notified luxury goods must ensure compliance from this date onwards.
Final Words
The latest changes to Section 206C(1F) under the Income-tax Act widen the ambit of TCS to include a range of luxury goods in addition to high-end motor vehicles. Businesses involved in the sale of such goods must update their systems and processes to collect and deposit TCS accordingly. Staying compliant not only avoids penalties but also builds credibility with buyers and tax authorities alike.
