Section 206C(1F) - TCS on Sale of Motor Vehicle & Notified Luxury Goods exceeding ₹10 Lakhs
# Section 206C(1F): TCS on Motor Vehicle and Notified Luxury Goods
## Applicability
Every seller who receives consideration for:
Sale of a motor vehicle of value > ₹10 lakhs, OR
Sale of any other notified goods of value > ₹10 lakhs
must collect tax @ 1% of sale consideration from the buyer.
## Timing
At the time of receipt of such amount (collection trigger is receipt, not credit).
## Notified Goods (Luxury Items)
1. Any wrist watch
2. Any art piece — antiques, painting, sculpture
3. Any collectibles — coin, stamp
4. Any yacht, rowing boat, canoe, helicopter
5. Any pair of sunglasses
6. Any bag (handbag, purse)
7. Any pair of shoes
8. Any sportswear and equipment (golf kit, ski-wear)
9. Any home theatre system
10. Any horse for horse racing in race clubs and horse for polo
## Key Points
₹10 lakh threshold is per item / per transaction value, not aggregate.
TCS is on the entire sale consideration, NOT just the amount exceeding ₹10 lakhs.
Applies to any seller, regardless of turnover.
Worked example
### Example 1
Example: Mr. R purchases a luxury car for ₹25,00,000 from a dealer.
Value > ₹10 lakhs ✓
TCS = 1% × 25,00,000 = ₹25,000 at the time of receipt.
### Example 2
Example: A jewellery store sells a designer handbag for ₹12,00,000.
Handbag is notified goods ✓; value > ₹10 lakhs ✓
TCS = 1% × 12,00,000 = ₹12,000.
### Example 3
Example: Mr. S buys a wrist watch for ₹8,00,000.
Value ≤ ₹10 lakhs → No TCS required.
⚠️ Common exam mistakes
Computing TCS only on the amount exceeding ₹10 lakhs (it is on full consideration).
Treating the threshold as aggregate sales to one buyer — it is per item / per sale of motor vehicle.
Forgetting that the seller's turnover is irrelevant under 206C(1F) — applies to ANY seller.
Missing the expanded list of notified luxury goods (yacht, helicopter, art, etc.).
Bare-Act text Section 206C(1F) · Income-tax Act, 1961 · click to expand
Section 206C(1F): Every person, being a seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding ten lakh rupees, shall, at the time of receipt of such amount, collect from the buyer, a sum equal to one per cent of the sale consideration as income-tax. The Central Government may, by notification in the Official Gazette, specify the goods, other than a motor vehicle, on receipt of consideration for sale of such goods exceeding ten lakh rupees, the seller shall collect tax at the rate of one per cent.