CBDT Introduces TCS on High-Value Collectibles

In a move that significantly impacts the collectibles market, particularly the numismatics and philatelic communities, the Central Board of Direct Taxes (CBDT), under the Ministry of Finance, issued a gazette notification on April 22, 2025, introducing a 1% Tax Collected at Source (TCS) on the sale of specified high-value luxury goods. This change, made under Section 206C(1F) of the Income Tax Act, 1961, is now in effect and covers luxury items such as coins, stamps, and other collectibles.

As per the notification, sellers or dealers are now required to collect 1% TCS at the time of receiving payment if the value of the goods in a single transaction exceeds ₹10 lakh. This marks an expansion of the TCS framework, which previously applied largely to the sale of high-end automobiles. The new rule explicitly focuses on per-transaction value, not aggregate annual purchases. Therefore, collectors and buyers need not be concerned if each transaction stays below the ₹10 lakh threshold, even if cumulative purchases in a financial year exceed that amount.

For example, if a collector purchases a coins or stamps worth ₹10 lakh in a single transaction, an additional ₹10,000 must be collected as TCS at the time of payment. This amount is not an extra tax burden since it can be adjusted against the buyer’s income tax liability when filing their returns. However, it does affect liquidity at the time of purchase and increases compliance obligations for sellers.

Beyond coins and stamps, the list of luxury goods now under TCS provisions includes wristwatches, art pieces such as antiques, paintings, and sculptures, yachts, canoes, helicopters, sunglasses, luxury bags, high-end shoes, sportswear, home theatre systems, and even horses used in racing and polo.

Clarifying the scope of the law, transactions dated before April 22, 2025, are not subject to this new TCS provision. Only those made on or after this date fall within the ambit of the revised tax regime. 

To illustrate, if a collector purchases a coins worth ₹5 lakh on May 1 and another worth ₹7 lakh on July 13 from the same seller, no TCS is applicable since neither transaction individually exceeds ₹10 lakh. However, if a coins worth ₹11 lakh is bought in a single transaction, TCS of ₹11,000 must be collected at the point of sale.

Importantly, TCS collected is not a cost to the buyer. Once properly reported by the seller against the buyer’s PAN, it appears in Form 26AS and can be claimed as a tax credit in the buyer’s ITR, similar to how Tax Deducted at Source (TDS) works for salaried individuals. In the event the TCS exceeds the buyer’s tax liability, a refund can be claimed.

This regulatory development is a clear step toward expanding the tax net and increasing transparency in high-value niche markets. For the numismatics community, it underscores the need for enhanced documentation, ethical practices, and financial planning.

Special thanks to CA Mr. Guru Charan H R for his insights and clarifications that helped bring clarity to this regulatory update.