Recently bought luxury watches, handbags, sneakers? Here are the items that will now attract extra tax

The Tax Collected at Source (TCS) provision in the the Income Tax Act came into effect on April 22, 2025. In line with this, luxury goods such as watches, footwear, and sportswear with a price tag of above ₹10 lakh will attract an extra 1 per cent tax.

The provision on specified luxury goods came into effect from Tuesday, according to the income tax department, with the obligation of TCS collection on the seller.

The latest move, which exercises clause (ii) of sub-section (1F) of section 206C of the Income-tax Act, 1961, underlines the Centre’s push to track ‘high-value discretionary expenditure’.

It was initially supposed to come into effect in Jan 2025 after it was passed in last year’s Union Budget. However, the latest Gazette notification puts the date as April 22, 2025.

This will also help the IT department in monitoring the audit trail in luxury spending, adding to overall financial transparency.

Notified goods above ₹10 lakh that attract 1 per cent TCS include:

  • Wristwatches
  • Paintings
  • Sculptures
  • Antiques
  • Collectables (including coins and stamps)
  • Yachts, Rowing boat, Canoe
  • Helicopters
  • Luxury handbags
  • Sunglasses
  • Shoes
  • High-end sportswear and equipment
  • Home theatre systems
  • Horses for horse racing in race clubs and for polo

This move also means that now luxury item sellers have to be more compliant with TCS provisions in a timely manner. People who buy notified luxury goods would also be subject to more KYC documentation.

IT Dept introduces ‘e-Pay Tax’ feature

Among other major announcements was the introduction of the ‘e-Pay Tax’ feature on the Income Tax Department’s online portal to make it simple for taxpayers to pay taxes.

Touted as an “elegant, efficient, and hassle-free method to fulfil your tax obligations”, the government arm said that it adds to its bid to ensure “timely compliance”.

“The ‘e-Pay Tax’ feature… brings tax administration closer to the citizen, especially for individuals and small businesses, offering a direct digital route for them,” said the tax department in a statement

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