Tax New Rules: The seller will cut 1% TCS and make tax deposit on your PAN number. This amount will appear in your form 26AS. You can claim it as a tax credit while filing ITR. If you do not have any tax liability, then this amount will be refunded to you.
If you are going to buy a luxury bag, expensive watch, branded shoes or golf kits which cost more than ₹ 10 lakh, then you will now have to pay 1% tax – which is called Tax Colleted at Source (TCS).
This rule has been implemented from 22 April 2025. The Incoming Tax Department has released a new list, which will take 1% TCS on the purchase of luxury goods – if the price is more than ₹ 10 lakh.
On which items is TCS applicable- If the value of these items is above ₹10 lakh, then TCS will be applicable:- Watches (Wrist Watch), Art Pieces (Antiques, Paintings, Sculptures), Collectibles (Coins, Stamps), Yachts, Helicopters, Boats (Rowing Boats, Canoes), Sunglasses, Handbags, Wallets, Shoes, Sports Gear (Golf Kit, Ski-Wear), Home Theatre System, Horses for Racing or Polo.
If PAN is not given then the rate of TCS will be 20%. That means on a purchase of ₹ 10 lakh, you will have to pay ₹ 2 lakh TCS! Through this, the government wants to stop unknown transactions.
What is the objective of the government- This scheme is not to increase revenue. Rather, its objective is to increase tax clarity, ensure income traceability, prevent under-reporting and tax evasion. If you have a hobby of luxury, then do not forget to provide PAN number in your purchases – so that you can avoid tax hassles later.