New Delhi7 hours ago
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Now the government has implemented 1% Tax Collection at Source (TCS) on the purchase of luxury items like watch, paintings, sunglasses, shoes, home theater systems and helicopters worth more than 10 lakh rupees. The Central Board of Direct Taxes i.e. CBDT has announced this by issuing a notification on Wednesday (23 April).
CBDT has said that the government has increased the scope of tax on high-volume shopping to monitor luxury expenses and register more than Rs 10 lakh transaction in income tax returns. The seller will be the responsibility of recovering this tax. 1% TCS on luxury items has been implemented from 22 April.
From now on, the seller will have to collect 1% TCS on a purchase of more than Rs 10 lakh. The central government has released a detailed list of luxury goods under TCS. The aim of which is to increase the tax base and monitor high-end expenses.
List of luxury items, which will be 1% TCS
1. Luxury Rist Watch
2. Arts like antique, painting, sculpture
3. Collectables like coin, stamp
4. Yacht, Rowing Boat, Cani, Helicopter
5. Pair of Sunglasses
6. Bags like handbags, purse
7. Pair of Shoes
8. Sports Wear and Equipment like Golf Kit, Ski Wear
9. Home Theater System
10. Hors for racing in race clubs and hores for polo
Notification of Central Board of Direct Taxes. This includes the list of luxury items.
After the budget proposal of July 2024, now the Center has released the list of luxury items. In the budget, a provision was made to impose tax on the purchase of more than Rs 10 lakh in view of the increasing expenses on the luxury items of High net worth individual (HNIS). However, then the government did not clarify which items would be considered as 'luxury'. Now the definition of 'luxury goods' has become clear from this list in terms of tax.
What is TCS?
TCS means tax collection at source. This means tax collected at the source (tax collected from income). TCS is paid by the seller, dealer, vendor, shopkeeper. However, he collects tax from a buyer or customer selling any goods.
After recovering it, the work of depositing it is that of a seller or shopkeeper. It is controlled under Section 206C of the Income Tax Act. Only vendors of certain types of objects collect it. This type of tax is deducted only when the payment is more than a limit.
