From Motor Vehicles to Luxury Goods: Expansion of TCS u/s 206C(1F)

CA KAJAL AGRAWAL | Last updated: 31 January 2026

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The Indian government has expanded Section 206C(1F) of the Income-tax Act to include Tax Collected at Source (TCS) on specified luxury goods sold for over Rs. 10 lakh. This change, effective from 22nd April 2025, aims to broaden the tax base and monitor high-value spending. Sellers of items like luxury watches, art, yachts, and high-end bags must now collect TCS at 1% on sales exceeding the threshold, with buyers able to claim this amount back when filing their tax returns.

To widen the tax base and track high-value consumption, the CBDT (via notification No. 36/2025) has expandedSection 206C(1F) to cover Tax Collected at Source (TCS) on the sale of specified luxury goods, effective from 22nd April, 2025. This provision is particularly important for dealers, manufactu

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About the Author

CA KAJAL AGRAWAL

CA In Practice

Chartered Accountant in practice with growing exposure in taxation, audits and compliance. Passionate about professional writing and continuous learning in the evolving tax landscape.

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