NFT Tax India: What You Owe and How to Report It in 2025
When you buy or sell an NFT, a unique digital asset stored on a blockchain, often used for art, collectibles, or virtual land. Also known as non-fungible token, it isn’t just a digital picture—it’s a taxable asset in India. The Indian government treats NFTs like any other digital asset, meaning every trade, sale, or swap could trigger a tax bill. If you bought an NFT for 50,000 INR and sold it for 1,20,000 INR, that 70,000 INR profit isn’t a gift—it’s taxable income.
Under India’s 2022 crypto tax law, NFTs fall under the same 30% tax bracket as other virtual digital assets. There are no deductions, no exemptions, and no offsetting losses against other income. Even if you trade one NFT for another, the IRS-style rule applies: you’re taxed on the fair market value at the time of the swap. And if you earn an NFT in an airdrop or as a reward? That’s also income, taxed at your full slab rate the moment you receive it. Many people think NFTs are tax-free because they’re not traditional currency, but the law doesn’t care what you call it—it cares about value exchanged.
Reporting NFTs isn’t optional. The Income Tax Department now cross-checks data from Indian crypto exchanges, wallet analytics, and blockchain explorers. If you’ve traded on Binance, WazirX, or CoinDCX, your transaction history is likely already in their system. Failing to report can mean penalties up to 200% of the tax due, plus interest and legal action. You need to track every transaction: purchase date, cost, sale date, sale price, and wallet addresses involved. Tools like Koinly or CoinTracker can help, but you’re still responsible for filing it correctly under Schedule CG in your ITR-2 form.
What about NFTs used for business? If you’re an artist selling your own NFTs regularly, the income is treated as business income, not capital gains. That means you can deduct expenses like gas fees, platform commissions, or software tools—but you also need to register as a business and file quarterly GST if your turnover crosses ₹20 lakh. This isn’t speculation—it’s a real business model, and the tax rules treat it like one.
And yes, foreign NFTs count too. If you bought an NFT on OpenSea with USDT and later sold it for a profit, that gain is still taxable in India. The country taxes its residents on global income, so location doesn’t matter. The only exception? If you’re not a tax resident, but most people reading this are.
There’s no gray area anymore. The government isn’t waiting for perfect systems—it’s already auditing. The crypto tax India, the legal framework governing taxation of digital assets including cryptocurrencies and NFTs is clear: if you made money from digital assets, you owe tax. The real question isn’t whether you need to pay—it’s whether you’ve kept the records to prove it.
Below, you’ll find real-world examples of how people in India have handled NFT taxes, what went wrong, and how to avoid the same mistakes. These aren’t theory pieces—they’re lessons from traders, artists, and investors who’ve been through it already. Whether you’re new to NFTs or you’ve been trading for years, this collection gives you the exact steps to stay compliant, avoid fines, and understand what the law actually says—no jargon, no fluff, just what you need to do next.