Non-Fungible Token (NFT)

A Non-Fungible Token (NFT) is a unique, cryptographically secured digital certificate of ownership recorded on a blockchain — most commonly the Ethereum blockchain — that represents ownership of a specific digital asset such as digital artwork, music, video clips, virtual real estate, gaming items, or collectibles. Unlike fungible tokens (such as Bitcoin or Ether, where each unit is identical and interchangeable), each NFT has a unique identifier that makes it non-interchangeable and verifiably scarce. The NFT market experienced a speculative bubble in 2021 to 2022 — with prices for certain digital artworks and collections reaching millions of dollars — before collapsing sharply in the 2022 to 2023 crypto market downturn. In India, NFTs are not regulated as securities by SEBI and are treated as virtual digital assets (VDAs) under the Finance Act 2022, subject to 30% flat income tax on gains and 1% TDS on transfers above ₹10,000. The Indian government's strict taxation framework and RBI's cautious stance on crypto and digital assets have significantly restrained NFT market development in India compared to global markets. For Indian investors, NFTs represent a highly speculative, unregulated, illiquid, and technically complex alternative asset class — lacking the institutional safeguards, price discovery transparency, and regulatory investor protections available for SEBI-regulated instruments such as equities, mutual funds, and bonds traded on NSE and BSE.