NFTs in India
This is general information, not legal, tax, or financial advice. It is not a recommendation to buy any asset. Verify the current rules with a qualified local professional and the official regulator before acting.
Buying, holding, and selling NFTs is legal in India, and most NFTs are treated as virtual digital assets under the Income Tax Act as of February 2026. That means a gain on transfer is taxed at a flat 30 percent under Section 115BBH, and a 1 percent tax at source applies under Section 194S. A government notification has indicated that some NFTs tied to an underlying tangible asset may sit outside the virtual digital asset definition, so the treatment of a specific token can be unclear. The Income Tax Department administers the tax.
How India treats NFTs
Non fungible tokens are named within the virtual digital asset definition in the Income Tax Act, so for tax purposes most NFTs are treated the same way as coins and tokens. Buying, holding, creating, and selling NFTs is legal in India as of February 2026, and there is no dedicated NFT law. Beyond tax, an NFT often points to underlying content such as art, music, or media, which can raise separate intellectual property and consumer protection questions that the virtual digital asset rules do not address. Those are worth checking independently of the tax position.
A carve out for some tokens
The treatment is not uniform across every token. A government notification has indicated that an NFT whose transfer results in the transfer of ownership of an underlying tangible asset may be excluded from the virtual digital asset definition. The boundary between an in scope collectible token and an excluded token tied to a real world asset can be unclear, so do not assume every NFT is automatically a virtual digital asset. Confirm the treatment for a specific token with a qualified professional, current to June 2026.
How NFTs are taxed
Where an NFT is a virtual digital asset, the standard rules apply. A gain on selling or transferring it is taxed at a flat 30 percent under Section 115BBH, plus a 4 percent cess and any surcharge, with only the cost of acquisition deductible, current to June 2026. A 1 percent tax deducted at source under Section 194S applies to transfers above the threshold. Losses on virtual digital assets cannot be set off against other income or carried forward. If you create and sell NFTs, your creator income can also be taxable, and the treatment of minting and royalties can be complex. Because the virtual digital asset boundary and creator treatment both carry uncertainty, verify your position with a qualified chartered accountant before filing.
Where to trade and settle NFTs
NFTs trade on dedicated marketplaces rather than only on exchanges, but you will often use a registered exchange to convert between crypto and rupees around an NFT trade. Several exchanges registered with the Financial Intelligence Unit India serve India residents as of February 2026 and supply the statements that help with reporting.
Compare exchanges available to India users
Registered platforms serving India residents include CoinDCX, CoinSwitch, ZebPay, Mudrex, and Binance. See the registered options side by side, then verify the current position with the platform and the regulator before you sign up.
Compare available exchangesRegulator and sources
- Income Tax Department and the Central Board of Direct Taxes (CBDT) the virtual digital asset definition, the notification on excluded NFTs, and Sections 115BBH and 194S, current to June 2026.
- Financial Intelligence Unit India (FIU) registration of the exchanges used to settle NFT trades in crypto and rupees.
Frequently asked questions
Are NFTs legal in India?
Buying, holding, and selling NFTs is legal in India, and most NFTs are treated as virtual digital assets under the Income Tax Act as of February 2026. There is no dedicated NFT law, and the underlying content may also raise intellectual property and consumer questions.
How are NFTs taxed in India?
An NFT that is a virtual digital asset is taxed like other crypto: a gain on transfer is taxed at a flat 30 percent under Section 115BBH and a 1 percent TDS applies under Section 194S, as of February 2026. This is not tax advice, so verify before filing.
Are all NFTs virtual digital assets in India?
Most are, but a government notification has indicated that an NFT whose transfer results in the transfer of ownership of an underlying tangible asset may be excluded from the virtual digital asset definition. The line can be unclear, so confirm the treatment for a specific token, as of February 2026.
Do I pay tax when I mint or sell an NFT in India?
Selling or transferring an NFT that is a virtual digital asset is a taxable event under Section 115BBH, and a 1 percent TDS may apply above the threshold. Creator income can also be taxable. Confirm your position, as of February 2026.
Can I offset NFT losses in India?
No. A loss on a virtual digital asset, including most NFTs, cannot be set off against other income or carried forward under Section 115BBH, as of February 2026. This is not tax advice, so verify before filing.
Who regulates NFTs in India?
There is no dedicated NFT regulator in India. The Income Tax Department sets the tax treatment, and the Financial Intelligence Unit India registers the trading platforms, as of February 2026.
Related pages
Risk and change note: crypto rules change frequently and can shift with little notice. The positions above carry an as of date and were last reviewed on June 21, 2026. Confirm the current rules with the named regulator and a qualified local professional before you act.
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