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NFT taxation depends on why you're in NFTs:
Digital economy · Crypto
NFT, creator vs trader: completely different tax treatment
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Provisions
IT Act, Sec 194 (old 115BBH; trader) | Sec 26 (old 28) business income (creator)
Analysis
NFT Creator (minting and selling your own art/content): This is business income, not VDA gains. Tax at slab rate under Sec 28 (profits from business). You can deduct platform fees, gas fees, software costs, content creation costs. If turnover above ₹20L: GST registration required. If above ₹50L and profession: Sec 58, Income-tax Act 2025 (old Sec 44ADA) available (50% presumptive). NFT Trader (buying and selling others' NFTs): This is VDA income, 30% flat under Sec 194 (old Sec 115BBH). No deductions except purchase cost. No loss set-off. 1% TDS if transacted on Indian platform. The classification matters enormously: Creator on a ₹10L NFT sale at slab rate (20%): ₹2L tax. Trader on the same ₹10L profit: ₹3L tax. Plus creator can deduct costs; trader cannot.
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