Do You Own the NFT You Bought? IP Rights, Smart Contracts and Digital Asset Ownership in India

In the NFT boom, people paid lakhs, sometimes crores, for digital art, profile pictures and collectibles. Many believed they were buying the artwork itself, with the right to print it on T-shirts, use it in ads or license it to others. Most were wrong.

When you buy an NFT, you usually own a token, not the copyright. The difference matters for creators, collectors and brands. This guide explains what NFT ownership means under Indian law: copyright in NFTs, NFT licences, smart contracts, how NFTs are taxed, and the legal remedies for buyers and creators when things go wrong.

What you actually buy when you buy an NFT

An NFT (non-fungible token) is a unique token recorded on a blockchain. Typically, the token contains or points to metadata, which in turn points to a file (an image, video or music track) usually stored somewhere else, often on IPFS or an ordinary server.

So when you buy an NFT, you usually get:

• Ownership of the token, recorded on-chain, which you can hold, sell or transfer.
• Whatever rights the project’s licence gives you in the underlying artwork, which might be personal display only, limited commercial use, or broad commercial rights.
• Not the copyright itself, unless there’s a valid written assignment.

Some projects have also lost the underlying files because they relied on centralised storage that later went offline, leaving holders with a token pointing to nothing. Check where and how the asset is stored before you buy.

Copyright and NFTs under Indian law

Under the Copyright Act, 1957, the creator of an artwork, music or video is the first owner of copyright, unless an exception applies, such as work made in the course of employment (Section 17).

Transferring copyright requires a written assignment

Section 19 requires an assignment of copyright to be in writing and signed by the assignor. It should identify the work, the rights assigned, the duration and the territory. If the duration isn’t stated, it’s treated as five years, and if the territory isn’t stated, it’s treated as India. Buying a token, by itself, doesn’t satisfy these requirements. Unless the NFT’s terms contain a valid written assignment, the creator keeps the copyright. The same rule applies to AI-generated artwork minted as an NFT; see our guide on who owns AI-generated content in India.

Licences are what most buyers get

Most NFT projects grant a licence through their terms of sale or website. These range from personal, non-commercial display to fairly broad commercial licences tied to holding the token. Read the licence before paying, because it defines your rights, not the marketing.

Moral rights stay with the author

Under Section 57, the author keeps the right to be credited and to object to distortion or mutilation of the work that would harm their honour or reputation, even after assigning copyright.

Minting someone else’s work is infringement

Turning an artwork you don’t own into an NFT, or using a brand’s trademark in an NFT collection, can infringe copyright and trademarks. In a well-known US case, Hermès v. Rothschild (2023), a jury found that “MetaBirkins” NFTs infringed Hermès’s Birkin trademark. Indian courts apply the same basic copyright and trademark principles to digital assets. If you are building an NFT brand, see our guide to trademark registration for startups.

Smart contracts, royalties and platform terms

Are smart contracts legally binding in India?

A smart contract is code that executes automatically on a blockchain. Indian law doesn’t have a specific smart contract statute, but a smart contract can form part of a valid contract under the Indian Contract Act, 1872, which requires offer, acceptance, consideration, capacity and a lawful object. Section 10A of the IT Act confirms that contracts formed electronically are valid. The legal “contract” is usually the combination of the code, the platform’s terms and the project’s terms. For how Indian law treats contracts made by automated systems, see our guide to AI agent liability in India.

Royalties aren’t guaranteed by code

Many creators expected smart contracts to pay them a royalty on every resale. In practice, major marketplaces moved towards making creator royalties optional from 2022 to 2023, so on-chain royalties are only as strong as the marketplace’s policy. If royalties matter to you, secure them contractually and choose platforms that enforce them.

Platform terms decide many disputes

Marketplace terms usually contain their own dispute resolution, governing law and liability limitations, often pointing to foreign courts or arbitration. Indian buyers and creators should read them before relying on a platform. A marketplace that holds assets in escrow may also need to register as a VDA service provider; see our guide to FIU-IND registration for crypto businesses.

How NFTs are taxed in India

Most NFTs are “virtual digital assets” under Indian tax law, so they follow the crypto tax rules (see our full guide to crypto tax in India):

• Gains on transferring an NFT are taxed at a flat 30%, plus cess, with no deduction other than the cost of acquisition and no set-off of losses (Best Tax Info).
• 1% TDS applies on payments for transferring NFTs above the thresholds.
• Some tokens that represent ownership of a real, tangible asset, where transferring the token legally transfers that asset, were excluded from the NFT definition by a 2022 government notification.
• Creators selling their own NFTs as a business may be taxed under business income rules and need to consider GST on their supplies.
• From 1 April 2026, exchanges and other reporting entities have formal crypto-asset reporting duties under Section 509 of the Income-tax Act, 2025.

Legal remedies for NFT buyers and creators

For creators whose work is minted without permission:

• Send takedown notices to the marketplace, which as an intermediary must act on unlawful content under the IT Rules or risk losing safe-harbour protection.
• Sue for copyright infringement under Section 55 of the Copyright Act for an injunction, damages and an account of profits. Knowing infringement is also an offence under Section 63, punishable with six months to three years’ imprisonment and a fine.
• Where your brand is misused, sue for trademark infringement or passing off. Our guide to what to do when your brand name is taken as a domain or handle covers similar remedies.
• Register your copyright and trademarks. Registration isn’t required for copyright, but it helps enforcement, and many brands now register marks for downloadable virtual goods (class 9) and online services.

For buyers who’ve been cheated:

• In a “rug pull”, where a project collects money and disappears, file a police complaint for cheating and criminal breach of trust under the Bharatiya Nyaya Sanhita, 2023, and for cheating by personation using a computer resource under Section 66D of the IT Act where it applies. Report it on cybercrime.gov.in.
• Where an Indian seller or platform misrepresented what you were buying, such as commercial rights that didn’t exist, consider a consumer complaint or a civil suit for misrepresentation and refund.
• Where you bought an infringing NFT in good faith, your remedy is usually against the seller, not the original creator.

Quick answers

Do I own the copyright when I buy an NFT?

Usually not. You own the token and whatever licence the project grants. Copyright stays with the creator unless there’s a signed written assignment under Section 19 of the Copyright Act.

Are smart contracts legally valid in India?

They can form part of a valid contract under the Indian Contract Act, and the IT Act recognises electronic contracts, but the code alone rarely captures all the legal terms.

How are NFTs taxed in India?

Most NFTs are virtual digital assets, taxed at 30% on gains with 1% TDS on transfers and no set-off of losses.

Related reading: crypto inheritance and India’s shelved crypto policy paper; also tokenized real estate in Dubai; also Web3 trade marks in India and the UAE and patent or trade secret for blockchain innovations; also copyright registration in India for Dubai-based creators.

Final word

At Halverton & Co., we advise investors, crypto and Web3 businesses and digital-asset holders on NFT projects, digital asset licensing, copyright and trademark protection, and Web3 disputes. We practise in Jharkhand, Maharashtra and before the Supreme Court of India, and act as fractional legal counsel for crypto, Web3 and fintech companies. Halverton & Co.: Where tech needs law!

Write to us at office@halvertonandco.com, or get in touch, to discuss your situation.

This article reflects the law and developments reported up to early October 2026. It is for general information only and is not legal, tax or investment advice. Crypto rules change quickly; please take advice on your specific facts before acting.