INDIA Law and Practice Contributed by: Roshnek Dhalla, Bijal Ajinkya, Moin Ladha and Shailendra Bhandare, Khaitan & Co
9.2 Counterfeit NFTs Like any other authenticity certificate, even an NFT can be counterfeited, whereby the originator of the NFT may not necessarily be the creator of the underly - ing artwork. Being an inherent limitation of an unregu - lated space, artists need to be vigilant if their artwork has been minted as an NFT and immediately report to the blockchain platform for its delisting. At best, the originator who minted the NFT can be traced using the unique wallet address that paid for such minting and that has been collecting royalties on each resale of the artwork. Indian law comprehends NFT counterfeiting as a cyberfraud and violation of the intellectual property rights of the artist. In light of related judgments, the authors understand that counterfeit NFTs can be ordered to be taken down globally when they originate from a wallet address located in India. 10. Gifts, Donations, Trusts and Inheritance 10.1 Planning for Generational Transfer of Artworks India has always been a land rich in art, from the time of its great rulers to the present day, with art play - ing an integral role in its cultural identity. Today, as wealth continues to surge across the country, Indians are rediscovering their aristocratic tastes, embracing both Indian and global art with renewed enthusiasm. The growing number of high net worth individuals (HNWIs) are increasingly investing in valuable art - works, sculptures and antiques, blending status with a deep appreciation for culture. Art has not only become a symbol of refinement but also a growing asset class within the portfolios of India’s wealthiest families. With India’s profound cultural and historical legacy, many of these works are treasured heirlooms, rich in emotional and historical significance. As these pieces continue to be passed down through generations, planning for their careful transfer has become essential, ensuring that the legacy of art and culture is preserved for the future. In this light, putting in place a formal mode of genera - tional transfer of such assets becomes extremely per -
tograph on behalf of someone) of such photograph, irrespective of the quality of the photograph. 8.2 Legal Protection for Different Types of Photographs Indian copyright laws do not distinguish between dif - ferent types of photographs as such. If a photograph is not an original work, and accordingly is not subject to copyright protection and is beyond the ambit of Indian copyright laws, it can be used by the general public without any restraints or prior approval. 9. Artworks and New Technologies 9.1 NFTs Non-fungible tokens (NFTs) and cryptocurrencies have recently gained immense popularity. NFTs are unique digital assets that are stored on blockchain technology, and cryptocurrencies are decentralised digital currencies that operate independently of cen - tral banks. NFTs are unique digital assets that are typically bought and sold on marketplaces such as OpenSea and Nifty Gateway. An NFT is considered to be a virtual digital asset and is defined by Section 2 (47) of the Income Tax Act, 1961. Further, any capital gain from the sale of such virtual digital assets will be taxable at 30%. Thus, any capital gain on the sale of NFTs will be taxable at 30% as per Section 115BBH, and no deductions will be allowed. Some popular examples of NFTs in an Indian con - text include the five couture pieces by Indian fashion designer Manish Malhotra, which were sold as NFTs and put in the form of a sketch/GIF. Furthermore, poem recitals by Bollywood actor Amitabh Bachchan were captured as an audio NFT before being auctioned for USD500,000. Another example involves Varun Desai, who creates digital installations using code-gener - ated video art and hand-drawn animation. Addition - ally, Indian multimedia artist Raghav KK’s work was recently sold for USD94,500 at Sotheby’s Burning Man art auction, as an NFT.
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