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—tcs-1-percent-luxury-goods-above-10-lakh-india [2026/07/10 22:17] (current) – created - external edit 127.0.0.1
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 +{{htmlmetatags>metatag-description=(From 22 April 2025, sellers collect 1% TCS on luxury goods like watches, bags and art when a single sale crosses Rs 10 lakh. You claim it back in your ITR.)&metatag-keywords=(TCS on luxury goods above 10 lakh, 1 percent TCS luxury goods, CBDT Notification 36 2025, Section 206C 1F, TCS watches handbags art India)&metatag-robots=(index,follow)&metatag-og:title=(1% TCS on Luxury Goods Above Rs 10 Lakh: 2025 Rules)&metatag-og:description=(From 22 April 2025, sellers collect 1% TCS on luxury goods like watches, bags and art when a single sale crosses Rs 10 lakh. You claim it back in your ITR.)&metatag-og:type=(article)}}
 +====== 1% TCS on Luxury Goods Above Rs 10 Lakh: 2025 Rules ======
  
 +If you buy a notified luxury item and a single sale crosses Rs 10 lakh, the seller must collect 1% Tax Collected at Source (TCS) from you and deposit it against your PAN. This applies from 22 April 2025 under Section 206C(1F) of the Income-tax Act, read with CBDT Notification No. 36/2025. The TCS is not an extra tax you lose. It is an advance against your income-tax, and you claim it back when you file your ITR.
 +
 +===== What is covered, at a glance =====
 +
 +CBDT Notification No. 36/2025 lists the exact goods that attract this 1% TCS. The Rs 10 lakh figure is a trigger threshold for a single item, not a slab. Once a single item crosses it, the 1% is charged on the full sale value, not just the part above Rs 10 lakh.
 +
 +^ Goods category ^ TCS of 1% applies if a single sale exceeds ^
 +| Wrist watches | Rs 10 lakh |
 +| Art pieces (antiques, paintings, sculptures) | Rs 10 lakh |
 +| Collectibles (coins, stamps) | Rs 10 lakh |
 +| Yachts, rowing boats, canoes, helicopters | Rs 10 lakh |
 +| Sunglasses | Rs 10 lakh |
 +| Bags (handbags, purses) | Rs 10 lakh |
 +| Shoes | Rs 10 lakh |
 +| Sportswear and equipment (golf kit, ski-wear) | Rs 10 lakh |
 +| Home-theatre systems | Rs 10 lakh |
 +| Horses for racing or polo | Rs 10 lakh |
 +
 +If a product is not on this list, this particular TCS does not apply to it, however expensive it is.
 +
 +===== Worked example: a Rs 15 lakh watch =====
 +
 +Suppose Kashvi buys a wrist watch for Rs 15,00,000 from an authorised dealer.
 +
 +  - The single item crosses the Rs 10 lakh trigger, so 1% TCS applies.
 +  - TCS is 1% of the full Rs 15,00,000, which is Rs 15,000. It is not 1% of the Rs 5 lakh above the threshold. So Kashvi pays Rs 15,15,000 in total.
 +  - The dealer deposits Rs 15,000 with the government against Kashvi's PAN and reports it in Form 27EQ. The dealer then issues Kashvi a Form 27D TCS certificate.
 +  - The Rs 15,000 shows up in Kashvi's Form 26AS and Annual Information Statement (AIS).
 +  - When Kashvi files her income-tax return, she claims the Rs 15,000 as a credit against her tax liability. If her total tax due is lower than her prepaid taxes, the excess comes back as a refund.
 +
 +So the real cost of the TCS is zero for an honest taxpayer. It is only a cash-flow timing matter, paid now and adjusted or refunded at ITR time.
 +
 +===== Who collects and who pays =====
 +
 +The **seller** collects the TCS. This is the dealer, showroom, gallery, boutique or auction house selling the notified item. The seller must collect 1% at the time of receiving the sale consideration, deposit it with the government, and file the quarterly TCS statement in Form 27EQ.
 +
 +The **buyer** bears the 1% upfront as part of the bill. Because the tax is linked to your PAN, you must give your correct PAN to the seller. If you do not have a PAN, a higher TCS rate can apply, so always quote your PAN on a high-value purchase.
 +
 +CBDT widened the reporting machinery for this through Notification No. 35/2025, which amended the Income-tax Rules and Form 27EQ so these luxury sales are tracked. Both notifications are dated 22 April 2025.
 +
 +===== How to claim the TCS credit in your ITR =====
 +
 +You do not file anything separately to recover the TCS. You claim it inside your normal income-tax return.
 +
 +  - Collect your Form 27D TCS certificate from the seller as proof of the amount collected.
 +  - Before filing, open your Form 26AS and your AIS on the income-tax portal and check that the TCS amount appears against your PAN.
 +  - While filing your ITR, enter the TCS in the schedule for taxes paid (the TCS / prepaid taxes section). The portal usually pre-fills this from 26AS.
 +  - The TCS is then set off against your total tax liability for the year.
 +  - If your prepaid taxes (TDS, TCS and advance tax together) exceed your final tax, you get the balance back as a refund after your return is processed.
 +
 +For context on how advance tax and prepaid credits fit into your overall tax for the year, see the [[https://righttoinformation.wiki/section-80e-education-loan-interest-tax-deduction-india|guide to common income-tax deductions]]. To keep your own records and challenge any wrong demand, [[https://righttoinformation.wiki/book|The RTI Playbook]] explains how to file precise, evidence-backed information requests with any public authority.
 +
 +===== Frequently asked questions =====
 +
 +==== Is the 1% charged only on the amount above Rs 10 lakh? ====
 +
 +No. The Rs 10 lakh is only the trigger that decides whether TCS applies to that single item. Once the item crosses it, the 1% is charged on the entire sale value. On a Rs 15 lakh watch the TCS is Rs 15,000, not Rs 5,000. This is different from some other TCS provisions that tax only the excess.
 +
 +==== Does the threshold apply to my total bill or to each item? ====
 +
 +It applies to a single item of a notified type. CBDT's own clarification says TCS is levied on the sale of a single item whose value exceeds ten lakh rupees. So one Rs 12 lakh painting attracts TCS, but two Rs 6 lakh paintings, each below the limit, would not, for this provision.
 +
 +==== Is the TCS an extra cost I lose forever? ====
 +
 +No. It is an advance tax collected in your name. You claim it as a credit in your ITR and adjust it against your tax due, and any excess is refunded. For a compliant taxpayer the only real effect is the timing of the cash, not the amount.
 +
 +==== From which date is this 1% TCS on luxury goods effective? ====
 +
 +It is effective from 22 April 2025, the date CBDT Notification No. 36/2025 was published in the Official Gazette under Section 206C(1F). Purchases of notified goods above Rs 10 lakh made on or after that date are covered.
 +
 +==== Which goods are covered? ====
 +
 +Wrist watches, art pieces such as antiques, paintings and sculptures, collectibles such as coins and stamps, yachts, rowing boats, canoes and helicopters, sunglasses, handbags and purses, shoes, sportswear and equipment such as golf kits and ski-wear, home-theatre systems, and horses used for racing or polo.
 +
 +===== Next steps =====
 +
 +  - On any luxury purchase near or above Rs 10 lakh, always quote your correct PAN so the TCS lands in your name.
 +  - Ask the seller for the Form 27D TCS certificate and keep it with your bill.
 +  - Before you file your ITR, reconcile the TCS in your Form 26AS and AIS, then claim it in the prepaid-taxes section.
 +  - If the credit is missing or wrong, raise it with the seller first, and use a written information request to a public authority where needed. Start with [[https://righttoinformation.wiki/|the RTI Wiki home page]] for the right tools and templates.
 +===== TCS 1% on luxury goods above Rs 10 lakh: Rules, exemptions, and refund =====
 +
 +TCS (Tax Collected at Source) at 1% on luxury goods above Rs 10 lakh — complete guide:
 +
 +  - **Step 1: What is TCS Section 206CR?** (a) under Income Tax Section 206CR: a seller must collect TCS at 1% on the sale of goods (if the sale value exceeds Rs 10 lakh per buyer per financial year), (b) the TCS is on the sale of goods (not services — goods include: jewelry, cars, electronics, furniture, luxury items — any goods), (c) the threshold is Rs 10 lakh (per buyer — per financial year — the TCS is on the amount exceeding Rs 10 lakh — NO, the TCS is on the entire sale value if it exceeds Rs 10 lakh), (d) the TCS is collected by the seller (at the time of sale — and deposited with the government — and the buyer can claim credit when filing ITR).
 +  - **Step 2: Who is covered?** (a) the seller: any person who sells goods (if the total sales of the seller exceed Rs 10 crore in the previous financial year — this threshold is for the seller, not the buyer), (b) the buyer: any person who buys goods (if the purchase value exceeds Rs 10 lakh per financial year — per seller), (c) the TCS applies to: (i) individuals, (ii) HUFs, (iii) companies, (iv) partnerships — any buyer, (d) the TCS does NOT apply to: (i) exports (goods exported out of India), (ii) transactions covered under other TCS provisions (e.g., TCS on scrap — Section 206CQ — or TCS on foreign remittance — Section 206CR), (iii) transactions where the buyer has a PAN-exemption certificate (under Section 206CR(2)).
 +  - **Step 3: How TCS works.** (a) the seller collects TCS at 1% (on the sale value — at the time of receipt of payment or invoice — whichever is earlier), (b) the seller deposits the TCS with the government (by the 7th of the next month — and files the TCS return quarterly), (c) the seller issues a TCS certificate (Form 27D — to the buyer — quarterly), (d) the buyer claims the TCS as a tax credit (in the ITR — the TCS is reflected in Form 26AS — and the buyer can adjust it against the tax liability — or claim a refund if the tax liability is less than the TCS).
 +  - **Step 4: Common issues.** (a) TCS not collected (the seller fails to collect TCS — the seller is penalized, but the buyer may also face issues — if the TCS is not reflected in Form 26AS), (b) TCS collected at wrong rate (the seller collects TCS at 1% — but the transaction is covered under a different TCS provision at a different rate), (c) TCS on returned goods (the buyer returns the goods — but the TCS has already been collected and deposited — the buyer has to claim a refund), (d) TCS on multiple purchases (the buyer makes multiple purchases — each below Rs 10 lakh — but the total exceeds Rs 10 lakh — the seller must track the cumulative purchases and collect TCS when the total exceeds Rs 10 lakh), (e) PAN not provided (if the buyer does not provide PAN: TCS is collected at 5% — twice the rate — 1% x 2 = 2% — or 5% as per Section 206AA).
 +  - **Step 5: How to claim refund.** (a) the TCS is a tax credit (not an additional tax — the buyer can claim it as a refund — if the total tax liability is less than the TCS), (b) file ITR (the TCS is auto-populated in the ITR — from Form 26AS — and the buyer can claim it as a refund), (c) the refund is processed by the CPC (after processing the ITR — the refund is credited to the bank account — within 6-12 months), (d) if the refund is delayed: file RTI with the Income Tax Department (ask for the status of the refund — and the reason for delay).
 +  - **Step 6: File RTI.** File RTI with the Income Tax Department asking for: (a) the TCS credit reflected in Form 26AS for PAN [number] (for the financial year [year] — the amount and the seller's TAN), (b) whether the TCS return has been filed by the seller (TAN: [number] — for the quarter [quarter] — and the TCS certificate issued), (c) the status of the ITR refund for AY [year] (PAN: [number] — the TCS credit and the refund amount), (d) whether the seller has been penalized for non-collection of TCS (if the TCS was not collected — the penalty under Section 206CR(6A) — 1% per month interest + penalty).
 +  - **Step 7: Exemptions and lower rate.** (a) lower rate certificate (under Section 206CR(2): the buyer can apply to the ITO for a lower TCS rate — or nil — if the buyer's total tax liability is expected to be nil), (b) the application is in Form 13 (online through TRACES — the ITO issues the certificate within 30 days), (c) exemption for exporters (goods exported — no TCS), (d) exemption for government entities (the TCS does not apply to the government — embassies, UN agencies — and certain notified entities), (e) Example: A buyer buys jewelry worth Rs 15 lakh — TCS at 1% = Rs 15,000 — the buyer can claim this as a refund (if the total income is below the taxable limit — or adjust against the tax liability).
 +
 +See [[https://righttoinformation.wiki/tcs-1-percent-luxury-goods-above-10-lakh-india|TCS 1% Luxury]] and [[https://righttoinformation.wiki/guide/find-pio-2026|Find PIO]].
 +
 +{{tag>tcs 1 percent luxury goods 10 lakh section 206cr tax collected at source refund form 26as pan lower rate certificate rti 2026}}