The Central Board of Direct Taxes (CBDT), vide Notification No. 36/2025, has expanded the scope of Tax Collection at Source (TCS) under Section 206C(1F) of the Income-tax Act, 1961.

📝 𝐒𝐮𝐦𝐦𝐚𝐫𝐲 𝐨𝐟 𝐍𝐨𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧

-𝐀𝐩𝐩𝐥𝐢𝐜𝐚𝐛𝐢𝐥𝐢𝐭𝐲: Sale of specified goods exceeding ₹10,00,000 per transaction.

– 𝐓𝐂𝐒 𝐑𝐚𝐭𝐞: 1% – 𝐅𝐨𝐫𝐦 𝐟𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞: Form 27EQ

– 𝐑𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲: Seller to collect and deposit TCS

-𝐋𝐢𝐬𝐭 𝐨𝐟 𝐍𝐞𝐰𝐥𝐲 𝐍𝐨𝐭𝐢𝐟𝐢𝐞𝐝 𝐆𝐨𝐨𝐝𝐬:

[1] Wrist watches

[2] Art pieces (including antiques, paintings, sculptures)

[3] Collectibles (e.g., coins, stamps)

[4] Yachts, canoes, rowing boats, helicopters

[5] Sunglasses

[6] Bags (e.g., handbags, purses)

[7] Shoes

[8] Sportswear and equipment (e.g., golf kits, ski-wear)

[9] Home theatre systems

[10]Horses used in racing or polo

𝐊𝐞𝐲 𝐂𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐬:

▪ The move focuses on luxury and lifestyle-related goods — areas previously under-monitored for TCS.

▪ Classification challenges may arise — for instance, the exclusive use of terms like “shoes” instead of “footwear.”

▪ Notably excluded: jewellery, designer apparel, and premium writing instruments — despite their high transaction values.

– 𝐀𝐜𝐭𝐢𝐨𝐧 𝐏𝐨𝐢𝐧𝐭𝐬 𝐟𝐨𝐫 𝐒𝐞𝐥𝐥𝐞𝐫𝐬:

Review inventory for notified items

Update billing and ERP systems to capture TCS obligations

Inform customers regarding TCS deduction and its availability as credit in their income tax returns

𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐢𝐧𝐠 𝐨𝐛𝐬𝐞𝐫𝐯𝐚𝐭𝐢𝐨𝐧𝐬:

-No TCS yet on jewellery, designer clothes, or luxury pens

-Only “shoes” mentioned – not “footwear” – opens door for classification confusion Focus is clearly shifting toward tracking luxury consumption

𝐖𝐇𝐀𝐓 𝐘𝐎𝐔 𝐍𝐄𝐄𝐃 𝐓𝐎 𝐃𝐎 𝐒𝐄𝐋𝐋𝐄𝐑𝐒:-

• Collect 1% TCS at the time of receiving payment.

• Deposit the collected tax with the government by the 7th of the following month.

• File quarterly TCS returns using Form 27EQ. 𝐁𝐔𝐘𝐄𝐑𝐒:

• Pay the additional 1% TCS over and above the invoice value.

• Claim credit for the TCS while filing income tax returns.

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