Under New Income Tax Rules, Buying Luxury Items Worth Over Rs. 10 Lakh Now Includes 1% TDS
From April 22, 2025, buying luxury items that cost more than Rs. 10 lakh will include an extra 1% tax, called Tax Collected at Source (TCS).
Saloni Kumari | Apr 24, 2025 |
Under New Income Tax Rules, Buying Luxury Items Worth Over Rs. 10 Lakh Now Includes 1% TDS
This new rule, under Section 206C of the Income Tax Act, was announced by the Income Tax Department. It applies to high-cost items such as luxury handbags, expensive watches, designer shoes, and branded sportswear.
This new rule was introduced in the Union Budget 2025 through the Finance Act to keep track of big purchases and grow tax collection.
Now, sellers must collect 1% extra tax when selling these expensive items:
The 1% tax will only be charged if the item costs more than Rs. 10 lakh.
Example: If you buy something worth Rs. 30 lakh, the seller will collect Rs. 30,000 as extra tax (TCS) from you.
One of the tax experts at Nangia Andersen LLP said this step will help the government keep better records of luxury purchases and promote clear and honest money tracking.
In addition to his, he also mentioned that:
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