Definition
NFT
A non-fungible token is a unique blockchain record representing ownership of a specific digital or tokenised item, such as art or collectibles. In India it can be a taxed VDA. This is informational.
An NFT is a one-of-a-kind token on a blockchain that points to a particular asset — digital art, music, in-game items or tokenised real-world objects — and records who owns it. Unlike cryptocurrencies, each NFT is non-interchangeable.
Owning an NFT proves a claim on the blockchain but does not automatically confer copyright or physical possession of the underlying work. NFT markets have seen extreme price swings and many to-zero outcomes.
In India, NFTs can fall under the VDA definition and attract the 30% tax and 1% TDS on transfer. This entry is informational only, not investment advice; NFTs are high-risk and often illiquid.
Related terms
- Virtual Digital Asset (VDA)Virtual Digital Asset is the term Indian tax law uses for cryptocurrencies, NFTs and similar tokens, bringing them under a specific, stringent tax regime. This is informational, not investment advice.
- Web3Web3 is a vision of an internet built on blockchains where users own their data, identity and assets through tokens and wallets rather than relying on centralised platforms. This is informational.
- Smart ContractA smart contract is self-executing code on a blockchain that automatically carries out agreed actions when conditions are met, without an intermediary. This is informational, not advice.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.