Non Fungible Tokens (NFTs) are gaining a lot of popularity in India. So far it is noticed that different countries have very little specific legislation for regulation of NFTs. Most of the countries such as USA, UK and Australia have imposed tax on NFT transactions in their jurisdictions including India as NFTs, are considered as property for tax purposes attracting different tax rates. In India certain notable changes were made by the government in the Companies Act, 2013, CGST Act, 2017 and Income Tax Act, 1961 for NFT transactions. NFT is not defined but is included in the definition of ‘Virtual Digital Asset’ under Income Tax Act 1961. There is no specific law for regulation of NFT in India and hence, there is a need to pass the Cryptocurrency and Regulation of Official Digital Currency Bill 2021to prevent future issues resulting from NFT transactions.
