Tax Alert: Wristwatch, paintings, home theatres worth over ₹10 lakh to attract tax collection at source

Tax collected at source: The Ministry of Finance's Central Board of Direct Taxes (CBDT) on Wednesday announced that people who purchase wrist watches, art pieces, and collectable coins, among other things, over ₹10 lakh will have to pay tax collected at source (TCS) of the purchase. 

What is TCS in taxation?

The concept of TCS or Tax Collected at Source is a selling tax paid by a seller when he collects the money for a commodity from the buyer at the time of the sale.

“The much-anticipated notification on TCS on luxury goods brings clarity on scope and thresholds. Effective April 22, 2025, the levy applies to notified products exceeding ₹10 lakh in value with tax applicable on the full transaction amount in excess of ₹10 lakhs,” said Munjal Almoula, the head of tax at BDO India. 

The taxation expert also notes that this move is a strategic step towards increasing tax transparency and tracking high-value consumption trends in India.

“This move is a strategic step towards enhancing tax transparency and tracking high-value consumption trends, a move that aligns with global trends in tax surveillance and tax transparency,” said Almoula. 

Full list of items under tax collection at source

1. Wrist watches above ₹10 lakh.

2. Any art piece like antiques, paintings, and sculptures above ₹10 lakh.

3. Any collectable items like a coin or a stamp worth over ₹10 lakh.

4. Any yachts or rowing boats, canoes, or helicopters purchased for more than ₹10 lakh.

5. Sunglasses worth more than ₹10 lakh

6. Any bag like handbags and purses worth more than ₹10 lakh

7. Shoes worth over ₹10 lakh.

8. Any sportswear or sports equipment, such as golf kits and ski wear, worth more than ₹10 lakh.

9. Home theatre systems worth over ₹10 lakh.

10. Any horse for horse racing in race clubs and horse for polo over ₹10 lakh.