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Apr 24, 2025
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Catch the nouveau riche! Income tax dept casts a new dragnet
India is spawning a new rich class, especially in its small towns, which splurges on personal luxury goods with abandon but often escapes the income tax net. But not anymore. The July 2024 Budget had proposed to bring the expenses made on luxury goods by the rich under the ambit of TCS (Tax collected at source) if cost of luxury goods is more than Rs 10 lakh. This tax is now taking effect from April 22, 2025. From wrist watches to art pieces to yachts to handbags, purses and shoes to golf kits, a number of luxury goods will now attract TCS.
However, with this new TCS, the government is not intending to bulk up its direct tax revenues. Once the TCS is collected from the buyer, it is the seller's duty to deposit the same against the buyer’s PAN.
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