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Luxury goods such as handbags, wrist watches, shoes and sportswear, price over £ 10 £ LAKH now attracts 1% tax collected by source (TCS).
The income tax department announced the usability of TCS in the amount of 1% when selling specified luxury goods, where the selling price exceeds £ 10 MAKH with efficiency from 22 April 2025.
The provisions of the TCS for luxury goods were introduced through the Financial Act 2024 within the budget submitted in July 2024.
The obligation to collect TCS must be on the seller with regard to notified goods such as wristwatches, art objects such as paintings, sculptures and antiques, collecting items including coins and stamps, yachts, helicopters, luxury handbags, handbags, sunglasses, top sports and equipment and horse systems and horse chambers.
Nangia andersen LLP Sandeep Jhunjhunwala said that this announcement operates the government’s intention to strengthen the monitoring of highly valuable discretional expenses and strengthen the audit trail in the luxury goods segment.
It reflects a wider political objective of expanding the tax base and support for greater financial transparency.
“Sellers will now be obliged to ensure timely compliance with TCS provisions, while buyers of the announced luxury goods can experience increased requirements and documentation KYC at the time of purchase.
“Although the luxury goods sector may undergo some temporary challenges, this measure is expected to promote formalization and improve regulatory supervision over time,” added Mr. Jhunjhunwala.
Published – April 23 2025 14:46