In exercise of the powers conferred by clause (ii) of sub-section (1F) of section 206C of the Income-tax Act, 1961 (43 of 1961), the Central Government has notified the following goods of the value exceeding ten lakh rupees for collection of tax at source.

1. any wrist watch
2. any art piece such as antiques, painting, sculpture
3. any collectibles such as coin, stamp
4. any yacht, rowing boat, canoe, helicopter
5. any pair of sunglasses
6. any bag such as handbag, purse
7. any pair of shoes
8. any sportswear and equipment such as golf kit, ski-wear
9. any home theatre system
10. any horse for horse racing in race clubs and horse for polo

Section 206C(1F) of the Income Tax Act earlier explicitly addresses TCS on the sale of motor vehicles. In the Finance Act 2024, this subsection has been expanded to cover the high-value transactions for improving compliance and collection efficiency.

Rate of TCS Applicable: 1%

Legal Provisions:

206C(1F) Every person, being a seller, who receives any amount as consideration for sale of:

(i) a motor vehicle; or

(ii) any other goods, as may be specified by the Central Government by notification in the Official Gazette,

of the value exceeding ten lakh rupees, shall, at the time of receipt of such amount, collect from the buyer, a sum equal to one per cent of the sale consideration as income-tax.

Does the Value include GST?

Yes, a sum equal to one percent of the sale consideration will include the GST as well.

For Example, you bought a RADO watch on 23/04/2025 from Mr. A:

Taxable Value: Rs. 10,00,000

GST: Rs. 180,000

Invoice Value/Consideration to be paid before TCS: Rs. 11,80,000

Consideration to be paid after TCS: Rs. 11,91,800

An amendment in TCS Return Form 27EQ is also made to incorporate these TCS Entries.

Compliance after TCS Collection

In the above Example, Mr. A will pay TCS to the government up to 7th May 2025. File the TCS Return Form 27EQ up to 15th July 2025 and Issue TCS Certificate to you up to 30th July 2025.