Tax New Rules: Taxpayers To Pay 20% Tax Instead Of 2% For Not Providing PAN Card?
Tax New Rules: The seller will deduct 1% TCS and deposit the tax on your PAN number. This amount will be visible in your Form 26AS. You can claim it as tax credit while filing ITR. If you do not have any tax liability, then this amount will be refunded to you.
If you are going to buy a luxury bag, expensive watch, branded shoes or golf kit worth more than ₹ 10 lakh, then you will now have to pay 1% tax – called Tax Collected at Source (TCS). This rule has come into effect from 22 April 2025. The Income Tax Department has released a new list, in which 1% TCS will be levied on the purchase of luxury goods – if the price is more than ₹ 10 lakh.
On which items is TCS applicable- If the value of these items is above ₹10 lakh, then TCS will be applicable:- Watches (Wrist Watch), Art Pieces (Antiques, Paintings, Sculptures), Collectibles (Coins, Stamps), Yachts, Helicopters, Boats (Rowing Boats, Canoes), Sunglasses, Handbags, Wallets, Shoes, Sports Gear (Golf Kit, Ski-Wear), Home Theatre System, Horses for Racing or Polo.
How does it work-When you buy any of the above mentioned goods for more than ₹10 lakh, the seller will deduct 1% TCS and deposit the tax on your PAN number. This amount will be visible in your Form 26AS. You can claim it as tax credit while filing ITR. If you do not have any tax liability, then this amount will be refunded to you.
If PAN is not given then the rate of TCS will be 20%. That means on a purchase of ₹ 10 lakh, you will have to pay ₹ 2 lakh TCS! Through this, the government wants to stop unknown transactions.
What is the objective of the government- This scheme is not to increase revenue. Rather, its objective is to increase tax clarity, ensure income traceability, prevent under-reporting and tax evasion. If you have a hobby of luxury, then do not forget to provide PAN number in your purchases – so that you can avoid tax hassles later.
The post Tax New Rules: Taxpayers To Pay 20% Tax Instead Of 2% For Not Providing PAN Card? first appeared on Rightsofemployees.com.
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