Luxury goods over ₹10 lakh to attract 1% TCS as CBDT amends Form 27EQ; check full list of items

The Central Board of Direct Taxes (CBDT) has amended Form 27EQ to expand the scope of tax on luxury goods and collectibles exceeding ₹10 lakh for the collection of tax collected at source (TCS).

The seller of certain goods worth over ₹10 lakh will be responsible for collecting 1% TCS from the buyer at the time of payment.

In a notification, the tax body said, "In exercise of the powers conferred by section 295 read with section 206C of the Income Tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962...These rules may be called the Income-tax (Eleventh Amendment) Rules, 2025.

This notification comes into force on the date of its publication in the Official Gazette, i.e. Tuesday, April 22.

Tax applicable on 'luxury goods' above ₹10 lakh: check list of items

• Wrist watch
• Antiques, painting, and sculpture
• Coin and stamp
• Yacht, rowing boat, canoe, and helicopter
• Sunglasses
• Handbag and purse
• Shoes
• Sportswear and equipment like golf kits and ski wear
• Home theatre system
• Horse for horse racing in race clubs and horse for polo

In a budget memorandum in 2024, the government had said, "It has been seen that there has been an increase in expenditure on luxury goods by high net worth persons. For proper tracking of such expenses and in order to widen and deepen the tax net, it is proposed to amend sub-section (1F) of section 206C to also levy TCS on any other goods of value exceeding ten lakh rupees, as may be notified by the Central Government in this behalf. Such goods would be in the nature of luxury goods."

The recent development aims to widen the tax base and capture high-value discretionary spending into the tax net.