CBDT has clarified the scope of the term non-fungible token under the Income Tax Act

The Central Board of Direct Taxes vide notification dated 30th June, 2022 has clarified the scope of the term non-fungible token under the Income Tax Act. The Central Government has specified that a token which qualifies to be a virtual digital asset shall be considered as a non-fungible token but shall not include a nonfungible token whose transfer results in transfer of ownership of underlying tangible asset and the transfer of ownership of such underlying tangible asset is legally enforceable.