No Income Tax on Transfer of NFT: CBDT notifies Exclusion of Non-Fungible Token as Virtual Digital Asset [Read Notification]

In a significant move, the Central Board of Direct Taxes (CBDT) has notified that the Non-fungible token (NFTs) shall not be treated as Virtual Digital Assets for the purpose of section 2(47) of the Income Tax Act, 1961.

A notification issued last day stated that “the Central Government hereby specifies a token which qualifies to be a virtual digital asset as non-fungible token within the meaning of sub-clause (a) of clause (47A) of section 2 of the Act but shall not include a nonfungible token whose transfer results in transfer of ownership of underlying tangible asset and the transfer of ownership of such underlying tangible asset is legally enforceable.”

As per section(47A)(a)"virtual digital asset" shall include any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme; and can be transferred, stored or traded electronically.

To Read the full text of the Order CLICK HERE

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