Hello frnds
Can anyone explain what are NFTs in simple terms and guide abt the good content about it ? there is lot of buzz arnd it . i want to learn what it is actually
Non-Fungible Tokens. In simple terms, fungible means replaceable. For example, if you go to a shop to buy a Kit-Kat, it doesn’t matter which Kit-Kat you get - since every Kit-Kat is the same. You can even trade this Kit-Kat for another Kit-Kat and you will have exactly the chocolate. So, it’s replaceable. And as evident as it is, on the contrary, non-fungible means non-replaceable. For example, the famous Mona Lisa painting is non-fungible. It’s unique and you can’t replace it since it’s one of a kind. You can take a photo of the painting or buy a print but there will only ever be the one original painting.
NFTs can be compared to the Mona Lisa painting but in a digital world. So, NFTs are digital assets that can be bought or sold online but they have no tangible form of their own. They are just tokens with proof of ownership of the digital arts.
I for one have been very reluctant to learn about blockchain and the market luckily I have seen how it simply affected the stock market, take BTCS for example. They are a blockchain technology focused company, which has announced that The Nasdaq Stock Market LLC has approved the listing of the Company’ common stock on The Nasdaq Capital Market (“Nasdaq”). The Company’s common stock which began trading on Nasdaq under trading symbol “BTCS” at the open of the market on Tuesday, September 14, 2021.
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Mr.“A” is Indian Resident .
He created a painting and listed it on the NFT platform and sold it and earned Etherium Crypto currency . Then , he sold that Etherium crypto currency for the bitcoin crypto currency . then . he sold that bitcoin crypto currency and earned the USD . then . he sold that USD and earned , thus , 10 Lakhs INR .
My question is : how and what would be the tax liability of that INR 10 lakhs earning of Mr.“A” ?
Our tax experts, @Quicko, have written this blog post on the taxation aspect of transacting in cryptocurrency. They’ll be able to help you better with this query 
i read that blog .
i have 2 queries :
(1) if i mine the bitcoin ; ‘mining’ process are classifiable as self-generated capital assets.
The sale of such bitcoins would, in the ordinary course, give rise to capital gains. However, the cost of acquisition of a bitcoin cannot be determined as it is a self-generated asset.
So , what would be the tax ? how the tax will be computed in this case ?
(2) if i create a painting picture . ( as it is a self generated asset . so , how the cost would be determined? )
and sell that artwork as NFT and earn Rs. 1 crore .
In such case ; how and what would be the tax ? how to determine the tax liability ?
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Treatment of Crypto is undetermined because the nature of the underlying asset is yet to be determined through legislation. In a recent interview, the CBDT chairman suggested that Income Tax Department is yet to receive directions from Finance Ministry & will make amendments as per legislation passed in parliament this winter session. Hence tax treatment of Mining, Investing, Trading, or Accepting Crypto in exchange for Goods or Services is anyone’s guess.
However, here are some common practices
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Mining Crypto Currencies: Since mining requires setting up a mining rig (equipment etc) which in turn consumes electricity & other resources. Miners can report crypto mined from mining as Business Income, claim expenses (including electricity bills, depreciation, etc.) & pay tax at applicable slab rates.
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Investing in Cryptocurrencies (including NFTs): Many financial regulators view investing in Crypto just like investing in securities (such as Equity or Debt). Therefore investing (buying and selling) crypto can attract Capital Gains. However, Cryptocurrencies are not legal tender and are mostly traded on unregulated exchanges, not attracting STT (securities transaction tax). Hence, capital gains on buying and selling Cryptocurrencies can be taxed similar to CG on buying and selling other assets such as Jewelry, Paintings, etc.
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Trading Crypto Currencies (including in exchange for Goods or Services): A lot of businesses these days accept Cryptocurrencies in exchange for Goods or Services (just like fiat currency). These can be simply treated as Gross Receipts & any profits or losses after subtracting expenses can be reported as Business income.
You can always report income from Crypto under Income from Other sources & pay tax at slab rates (catch all rule). However, you should get in touch with a qualified CA to get the best advice for your financial situation.
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Ohh, it was interesting to get to know
Thank you, friend
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So , basically NFT token is softcopy rights of the ownership .
The physical hardcopy remains with the seller/creator only .
The investor/purchaser just buys the softcopy of it .
am i right ?
now , i have a doubt .
there is a famous painter artist Mr.“X” .
he creates a painting and sells it on the NFT platform for USD 1000/=
i buy that NFT token and pay equivalent crypto money …
So , i become the owner of that art piece creation ; right ?
BUT , the hardcopy physical copy ownership remains in custody of the seller only ! right ?
now , if after 2~3 years ; what will happen , if the same seller creates a new/fresh NFT of the same art piece and lists it on the NFT exchange platform afresh ?
Hmm no. Think of NFTS are collectibles. Let’s say an artist decides to create 100 NFTs of a painting, all 100 NFTs of the painting will have unique ownership which will be recorded on the blockchain There’s no hardcopy or softcopy.
Yes
No such thing as a hard copy
That’s the risk
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ok . then . where is the actual physical painting ? in whose custody it is with ?
i recently heard that : NFT are being used in hawala money laundering . converting black money in white in paying just 10% capital tax .
E.g. :
Mr.“A” transfers 100 crores cash via hawala transaction . then .
He Creates a painting art creation which is then listed as NFT on the platform .
The NFT is bought officially legally at 100 crores ; by someone sitting any part of the world .
Thus , Mr.“A” receives 100 crores officially legally .
Mr. “A” pays 10% legal Tax .
===
Bingo : 100 crores black money ;converted to white ; by just paying 10% tax .
All legal . All official . all authorized !
NFT is mainly for digital art. NFT can never be unique if there is a physical version of it also.
Yep, absolutely possible. In any case, physical art was also a big way folks used to launder money. With NFT’s, Crypto, etc it has become much easier and almost anyone can do it now. Hence Govt is I guessing working hard to put regulations around this.
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YouTube hints at possible NFTs in the works. Wonder how that would work since they’re majorly a video streaming platform.
NFTs are the talk of the town right now. Everybody are talking about these digital assets, and even going so far as putting out their own. Found this interesting article which explains how one can create their own NFT.
If you could create an NFT, what would it be?
https://www.theblockcrypto.com/post/139554/a-350000-bored-ape-nft-was-just-sold-for-only-115
Kind of confused if buying it at 350000$ is weird or selling it at 115$ by mistake is weird. I’d still pick the former
Hi guys,
I always searching for new pieces to add to my NFT collection. Recently I came across the Piewbe artist on Opensea, he/she has one artwork which celebrates Bitcoin 13th anniversary. Did you hear about this artist? Any similar artworks recommendations that tells a story related to cryptocurrency?
Appreciate any help 