Non-fungible Token (NFT) – Section 2(111)(i) | Income-tax Act, 2025 vs 1961

§ 2(111)(i) · Income-tax Act, 2025

Non-fungible token

ITA 2025 · 2(111)(i) ≈ Expl. to S.2(47A)(a) · 1961 Act
Definition — Section 2(111)(i)

This is a sub-definition within the definition of "virtual digital asset" under Section 2(111) of the Income-tax Act, 2025. "Non-fungible token" means such digital asset as the Central Government may, by notification, specify. The definition is deliberately open-ended — it gives the Central Government flexibility to specify which tokens qualify as NFTs for tax purposes, and equally to exclude any digital asset from the VDA definition by notification.

Act Comparison
Income-tax Act, 2025
2(111)(i)
Non-fungible token
Income-tax Act, 1961
Expl. to S.2(47A)(a)
Non-fungible token — defined in Explanation to S.2(47A)(a)
Key Points
  • Existed in the 1961 Act as an Explanation to Section 2(47A)(a) — the 2025 Act carries it forward as a sub-definition within Section 2(111)
  • NFTs are Virtual Digital Assets — taxed at a flat rate of 30% under the 2025 Act
  • TDS provisions under the 2025 Act apply to transfers of NFTs above prescribed thresholds
💡 Practical Note

Selling an NFT artwork at a profit? It's taxed at 30% — same as Bitcoin. Losses from NFT sales cannot offset other income or even other crypto gains.

Published by Simplified Tax India — Clear, section-wise comparison of Income-tax Acts. ← Back to Section 2 Definitions Table
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