The Legal Status and Taxation of Trading Cards in India

Note: This is general information for awareness; for transaction-specific advice, a CA/tax lawyer should review the facts.

Collectible trading cards, whether physical (like Pokémon or Yu-Gi-Oh! cards) or digital (NFT-based cards), occupy a unique niche at the intersection of hobby, investment, and law. With rare cards fetching sky-high prices (a UK Pokémon card set from the 1990s sold for over ₹57 lakh in 2024, and a Malaysian collector sold his Pokémon collection for ₹3.8 crore in 2025), understanding their legal classification and tax treatment is increasingly important. This article analyzes how Indian law treats such collectibles, the applicable GST and income tax implications, differences for digital assets, and draws comparisons with U.S. law and practice (as seen on shows like Pawn Stars). Throughout, we’ll keep it accessible and insightful, with clear headings and key points for easy scanning.

Legal Classification of Collectible Cards in India

Are trading cards “goods,” “antiques,” or “art”? In Indian law, physical trading cards are generally considered movable property (goods). They are mass-produced game/collectible items, not unique works of art or currency. Notably, India’s Antiquities and Art Treasures Act, 1972 defines an “antiquity” as objects like coins, sculptures, manuscripts, etc., over 100 years old. Modern trading cards (e.g. Pokémon cards from 1996 onwards) clearly do not qualify as antiquities, so they aren’t subject to the strict controls on antiques (such as mandatory registration or export bans for 100+ year-old art). Likewise, these cards are usually not treated as “art treasures” under that law; they feature commercial artwork and are printed in large volumes, unlike a one-of-a-kind painting.

However, the legal line can blur when defining “collectors’ items” or “works of art” for tax purposes. The Income Tax Act, 1961 classifies archaeological collections, drawings, paintings, sculptures, and “any work of art” as capital assets.often arguable as non-capital asset/personal effects—fact-specific. This open-ended term “work of art” could theoretically include certain collectibles and bring them under capital gains tax. In practice, though, it’s arguable that a trading card (even a rare one) is not a “work of art” in the conventional sense; it’s essentially printed memorabilia. Indian law does not have a special category for general collectibles like trading cards the way some countries do. Unless a card is exceptionally old or historically significant (e.g. a 19th-century cigarette card, which could be an “antique” if over 100 years old), it will be treated as a normal movable property.

Bottom line: Physical collectible cards in India are treated as ordinary goods/property, not regulated antiquities. They can be owned and traded freely, subject only to standard laws (contract, sale of goods, etc.); no special permit is needed to collect or sell them domestically. Export/import is allowed too, since they aren’t antique; one just must comply with customs requirements (discussed below). Digital trading cards (like NFTs) are intangible, but as we’ll see, Indian law now explicitly recognizes and taxes them as digital assets.

Tax Implications in India for Collectible Cards

Trading card transactions can trigger three kinds of taxes in India: Goods and Services Tax (GST) on sales, income tax (or capital gains) on profits, and possibly customs duties on import/export. The treatment can vary based on whether you’re a casual collector selling a card or a professional dealer, and whether the card is physical or digital.

1. GST on Card Sales

For physical cards, any sale by a business (store, online seller, or even a serious hobbyist regularly selling) would be considered a supply of goods under GST. Collectible cards don’t have a unique GST category; they fall under broad headings like toys/games or collectibles. In fact, playing cards are enumerated under HSN code 9504 ;initially taxed at 12%, later revised to 18–28% GST. Pokémon cards and similar items likely fall in this bracket as they are essentially game cards. Thus, a registered seller must charge GST (e.g. around 18%) on the sale value of new packs or single cards.

Importantly, casual collectors who occasionally sell a rare card from their personal collection might not need to register under GST at all, if such activity is not in the “course or furtherance of business.” GST law provides thresholds (currently ₹40 lakh/year for goods) below which registration isn’t required for casual, non-business sales. So, if you as an individual sell one old card to another collector, GST generally would not apply (similar to selling your used furniture or books). But a full-time trader flipping cards for profit would need to comply with GST.

For digital cards (NFTs), the GST situation is evolving. There’s ambiguity whether an NFT sale is supply of goods (as an intangible good) or a service. As of now, no specific GST rate is fixed for NFTs; however, the government has hinted at treating crypto assets under GST. Until clarity comes, most NFT platforms charge standard 18% GST on fees or consider it under services. The lack of classification is noted as a challenge: there is “ambiguity regarding classification—are NFTs ‘goods’, ‘services’, or ‘assets’? GST applicability remains uncertain.”. In summary, physical card sales attract GST like any other goods, whereas NFT card sales have uncertain GST treatment pending guidance (though one should be prepared for taxation on those as well, potentially at 18% or even 28% if treated like “online gaming” or collectibles in future).

2. Income Tax and Capital Gains

Profits from selling a collectible card can be taxed under the Income-tax Act, but the tax treatment differs based on the item’s nature and the seller’s intent. Key scenarios:

• Hobbyist selling personal collectibles: Indian tax law interestingly exempts “personal effects” from capital gains tax. Personal effects are movable property held for personal use: clothing, furniture, etc. According to experts, items like “notes, coins, stamps, furniture, and even wines” are considered personal effects and kept out of the tax ambit. One might argue a set of Pokémon cards kept for personal enjoyment is a personal effect (akin to a stamp collection). In fact, the law explicitly excludes certain collectibles from capital assets, including “archaeological collections, drawings, paintings, sculptures or any work of art”; these are taxable capital assets, but by implication, other collectibles (coins, stamps, etc.) are not treated as capital assets. Thus, if you sold a few childhood Pokémon cards, any gain might not be taxed as capital gains due to this exclusion.

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  • Example: In one case, a collector sold a special coin set for ₹3.25 lakh; since coins are personal effects, no capital gains tax was directly applicable. Likewise, selling a rare trading card could be viewed similarly.

  • However, caution: The law here is ambiguous and case-specific. The term “work of art” is open-ended and could be stretched to include certain collectibles. Tax authorities have latitude ;a valuable limited-edition card might tempt an officer to call it a collectible investment rather than a personal use item. High-value transactions can draw scrutiny. If the item isn’t clearly exempt, or if the amounts are huge, the Income Tax Department may still tax the profits. In practice, if capital gains tax doesn’t apply, they could classify the windfall as “Income from Other Sources” and tax it at slab rates. In that case, the entire sale amount might be treated as income unless you can prove a purchase cost, etc., so one should keep documentation of how the card was acquired.

    
    

• Investors and dealers: If one actively trades cards as a business, e.g., running a shop or frequently buying/selling for profit, the income would be taxed as business income or profession. All profits would then be added to your taxable income (minus allowable expenses) and taxed at your applicable slab rate (which for a company or firm could be ~30%). No capital gains provisions apply in such cases because the cards are treated as stock-in-trade rather than capital assets.

  
  

• Capital gains (for collectible treated as capital asset): If a particular card or collectible is considered a capital asset (for instance, a painting or antique card would be; or if the tax officer deems your Pokémon card a “work of art” in a grey-area scenario), then normal capital gains rules apply. That means if held for more than 3 years (the definition of long-term for movable assets), the gain is taxed at 20% with indexation (or 10% without indexation, in some cases). If held shorter, it’s short-term capital gain, added to your income and taxed at slab rate. Notably, India does not have a special higher rate for collectibles as the U.S. does; it’s the standard rates, except that cost indexation can cushion long-term gains. (Do note: recent budgets have proposed removing some indexation benefits for assets like debt funds, but for collectibles/art the 20% with indexation still generally applies.)

  
  

In summary, Indian income tax on selling cards is in a gray zone. Many collectibles are effectively tax-free (often arguable as non-capital asset/personal effects—fact-specific) when sold (treated as personal movable property), but the very valuable ones can raise questions. It’s wise to keep evidence of original costs or inheritance documents to establish your cost basis, in case the taxman inquires. And if you’re running a regular buy-sell venture, you must report it as business income. Lastly, no wealth tax applies (wealth tax was abolished in 2015, and even earlier, collectibles weren’t part of wealth tax except certain art under a proposed but shelved Direct Taxes Code).

3. Taxes on Digital Card Trading (NFTs)

The rise of NFT trading cards ;digital collectibles often tied to blockchain, adds a new dimension. India’s tax policy in 2022 explicitly brought Virtual Digital Assets (VDAs) like cryptocurrency and NFTs into the tax net. Any income from the transfer of an NFT is taxed at a flat 30% rate (similar to lottery or gambling winnings) regardless of holding period. In addition, 1% TDS (tax deducted at source) applies on each transfer of a VDA, which includes NFT trades. This means if you sell a Pokémon card NFT for, say, ₹1,00,000, the platform/buyer will withhold ₹1,000 and you’ll have to pay 30% on the profit when filing taxes (with no slabs or lower rates even if held long-term). Notably, no deduction for expenses or losses is allowed to offset NFT gains ;each transaction’s gain is fully taxable. This harsh regime (effective from FY 2022-23) is designed to dissuade speculative trading to an extent.

For GST, as mentioned, it’s unclear but likely the government will treat providing an NFT as a service or intangible supply. There have been discussions to impose GST on crypto/NFT transactions (potentially at 18% or even higher if treated on par with betting/gaming), but at present, no concrete GST rules specifically target NFTs. Businesses dealing in NFTs should be cautious ;for instance, if an Indian artist mints and sells digital trading cards, the service of selling those might be seen as an “online information/database access” service, attracting 18% GST on commissions or sale value. Internationally too this is an unsettled area, but Indian tax authorities are expected to clarify GST on digital assets soon.

Key legal point: Unlike physical cards, digital cards (NFTs) don’t have a concept of “personal effect” ;they are clearly treated as investments/financial assets under law. So even a one-off sale of an NFT you bought is taxable at 30%. The regulatory regime for NFTs is still evolving (there’s no specific statute governing them yet, aside from the tax provisions). The Information Technology Act, 2000 applies to electronic records generally and would cover issues like fraud or hacking of NFTs, but it does not explicitly recognize blockchain tokens. As scholars note, existing laws on contracts, IP, etc., provide partial coverage but aren’t fully equipped for NFTs. The expectation is that future regulations or a Digital Assets Act will define legal rights around NFTs more clearly. For now, the Finance Act and Income Tax Act treat them primarily as taxable assets.

Regulatory Considerations: Customs, Import/Export and Laws

Importing or exporting physical collectibles: Trading cards are generally simple paper products, so there is no prohibition on importing them into India or exporting them, as long as they’re not antiquities. Customs will, of course, levy duties on imported cards. Typically, playing cards or trading card games would incur import duty (basic customs duty might be around 20% for toys/games) plus IGST (integrated GST, often 18%) on the landed value. For example, if a collector imports rare card packs worth $100, they might pay roughly ~$40 in taxes (duty + GST) depending on classification. There are no special import restrictions on such collectibles ;they aren’t like firearms or antiquities. Exporting modern cards is legal; unlike, say, antique art or ancient coins, you don’t need a license to send out a 1999 Pokémon card. One just needs to follow FEMA/Customs norms if the value is significant (e.g. doing proper paperwork for a high-value shipment and repatriating sale proceeds through banking channels).

IT Act and digital assets: For digital trading cards, regulations are mainly about cybersecurity and fraud. The IT Act penalizes hacking or tampering with computer systems ;which could cover someone stealing your NFT from a wallet. But newer issues (smart contract exploits, unauthorized minting of someone else’s artwork as an NFT) are not directly addressed yet. The government has been working on a revised Digital India Act which may incorporate elements relating to blockchain assets. Additionally, RBI and securities law are in play: if an NFT is structured more like a security or has characteristics of a derivative (some NFTs fractionalize ownership of assets), regulators could invoke securities regulations or RBI’s forex rules. For instance, if an Indian buys an NFT from an overseas platform for crypto, technically that is a cross-border transaction; currently it exists in a gray area outside RBI’s Liberalized Remittance Scheme (since crypto is not officially recognized currency). These issues remain largely untested, but anyone trading in high-value NFTs should be mindful of potential foreign exchange regulations until India formalizes crypto asset laws.

Summing up regulatory landscape: Physical cards face minimal regulatory hurdles apart from tax. Digital cards inhabit a nascent regulatory space: they are taxed heavily but not yet comprehensively regulated beyond that. Customs sees physical collectibles as regular goods (with Chapter 97 covering art/antiques at low duty, but Pokémon cards wouldn’t qualify under that preferential category of “collectors’ pieces of historical or numismatic interest”). And importing toys/cards can be relatively expensive due to high import duties aimed at protecting domestic toy industries. For example, India has imposed steep import taxes on toys and collectible figures (70% in some cases), which can encompass trading card packs as well, making them pricier for Indian buyers. Exporting valuable cards may require declaring them for insurance and customs; but since they’re not banned items, it’s routine otherwise.

International Comparisons: How the U.S. and Others Handle Collectibles

Looking abroad provides context, especially the United States, which has a vibrant trading card market (sports cards, Pokémon, etc.) and well-established tax rules for collectibles. In the U.S., the IRS considers most collectibles as capital assets, but with a twist: long-term gains from collectibles are taxed at a higher rate (28%) rather than the usual 15-20% for other investments. This includes things like coins, stamps, artwork, rare memorabilia ;and potentially trading cards. Fans of the TV show “Pawn Stars” will know that “a random collectible — say, the first issue of a Superman comic or a rare 1913 Liberty Head nickel—may be worth a fortune”, and Uncle Sam knows it too, taxing collectible sales accordingly. The U.S. tax code explicitly lists categories of “collectibles” (e.g. any work of art, rugs/antiques over 100 years, gems, coins, alcoholic beverages, etc.). Trading cards are not expressly listed, but some can fall under “antique” if over a century old or potentially under the open category of a tangible personal property that IRS deems collectible. Notably, a 2022 tax commentary argued that Pokémon and Magic: The Gathering cards are not currently treated as “collectibles” under U.S. tax law unless they qualify as antiques, meaning newer cards should not incur the 28% rate (they’d be taxed at normal capital gains rates). Indeed, absent guidance, many U.S. card sellers pay the standard 15-20% long-term capital gains tax on profits. However, this may change; in 2023 the IRS signaled it might classify certain NFTs as collectibles, which would subject them to the 28% rate and also bar them from being held in tax-advantaged retirement accounts.

Short-term gains in the U.S. (held under a year) are taxed as ordinary income, similar to India adding STCG to your slab. The U.S. also disallows capital losses on personal use collectibles; if you sell your personal collection at a loss, you generally cannot deduct that. The interplay of hobby vs. business is also present: Americans who frequently flip collectibles might have the IRS treat them as a business (with income subject to self-employment tax, etc.), whereas casual sales by a collector are capital gains.

In terms of sales tax, U.S. states typically charge sales tax on tangible personal property, including trading cards, when sold by a business. So buying a pack of cards at Walmart in California will include sales tax, and even peer-to-peer online sales could triggertaxesx if facilitated by marketplaces (eBay, for example, now automatically collects sales tax on collectible sales for many states). This process is is somewhat akin to India’s GST on goods. Additionally, for very high-value collectibles, estate and gift tax considerations come in the U.S. ;wealthy collectors insure and appraise their collections not just for selling, but for passing them on. Shows like Pawn Stars and Antiques Roadshow highlight this issue—the need for expert appraisals, and U.S. tax law too requires formal appraisals if one donates collectibles above a certain value to claim a tax deduction.

Other countries: Many other jurisdictions treat collectible cards as taxable personal property as well. The U.K., for instance, taxes capital gains on collectibles but has exemptions for “personal chattels” worth £6,000 or less ;this could let small card sales go untaxed. The U.K. also classifies certain collectibles as “wasting assets” (with a lifespan under 50 years, like wine or maybe modern cards which fall apart?!) which can be exempt, but generally a valuable Pokémon card in the U.K. would incur capital gains tax (28% for higher rate taxpayers, since it’s just treated as an asset sale). Europe has VAT on sales of goods, so a dealer selling cards in the EU must charge VAT (though collectibles can get special schemes for margin scheme VAT). Countries differ on whether collectibles are subject to wealth taxes or not ;most have done away with those for personal items, similar to India.

One interesting aspect is how international customs treat collectibles. Some countries exempt original artworks from import duties to encourage cultural exchange, or charge lower duty on antiques. India, for example, has a low 5% GST on import of original art and antiquities, and even waived customs duty on imported art/antiquities in 2025 to boost the art market. But these breaks wouldn’t apply to trading cards since they’re neither original art (they are mass-printed) nor antiquities. Meanwhile, a country like the U.S. generally doesn’t impose import tariffs on collectibles beyond sales tax, whereas China in the past imposed luxury taxes on items like art and antiques. Context matters: India’s focus has been preventing smuggling of true antiquities and regulating gold/precious materials; trading cards haven’t been a regulatory focus beyond tax.

In short, globally trading cards inhabit the collectible category and are taxed, but specifics vary. The U.S. system explicitly targets “collectibles” with a higher tax rate and prohibits things like holding a Charizard card in your IRA retirement account (just as you can’t put a painting in an IRA). India doesn’t have such nuance yet ;here the debate is still whether a collectible is taxable at all or a personal effect. As the market grows, we could see Indian tax law refined to specifically address these items (perhaps via rules for “luxury collectibles” or through the mooted increase of TCS on luxury goods sales).

Conclusion

Collectible cards straddle the line between hobby and investment, requiring a nuanced legal approach. In India, the framework is still catching up ;physical cards are treated like ordinary goods (with GST and potentially capital gains rules that often exempt personal collectibles), whereas digital cards are already taxed heavily under new VDA provisions. There is currently no special legal status for a Pokémon card as there is for a painting or an antique, but that also means savvy collectors can sometimes enjoy tax-free gains by claiming them as personal effects. The flip side is ambiguity: one tax advisor calls the law on taxable collectibles “ambiguous” and notes the open-ended nature of “work of art” could bring many items into the net. Going forward, clearer definitions (perhaps via rules or judgments) would help both collectors and authorities.

International practices show a range of approaches ;the U.S. hits long-term collectible gains with a higher tax and disallows personal loss write-offs, whereas India so far either taxes you at regular rates or not at all, depending on interpretation. As the Indian collectibles market heats up, we might see moves to introduce policies akin to the U.S. (for example, a mooted 1% TCS on high-value collectibles sales as an anti-evasion measure). Policymakers will need to balance encouraging a hobbyist market ;where genuine enthusiasts trade cards and build communities ;with preventing abuse (such as using high-value collectibles for money laundering or tax evasion, a concern globally). On the digital front, regulation under IT or a new crypto law will be crucial to address issues beyond tax, such as defining ownership rights and fraud remedies for NFTs.

REFERENCES USED - 

1) UK auction (Pokemon collection ~£56,000): https://www.nottinghampost.com/news/nottingham-news/pokemon-card-collection-sells-9523055

2) UK auction coverage (alt): https://www.nottinghampost.com/news/nottingham-news/pokemon-card-collection-sells-9523055

3) Malaysia high-value Pokémon collection sale coverage: https://www.businesstoday.com.my/2025/02/10/collectors-pokemon-card-collection-sells-for-over-rm2mil/

4) Antiquities & Art Treasures Act, 1972 (India Code): https://www.indiacode.nic.in/handle/123456789/1627

5) Sale of Goods Act, 1930 – “goods” definition (India Code): https://www.indiacode.nic.in/handle/123456789/2375

6) Income-tax Act – capital asset / personal effects (Sec 2(14)) (Income-tax portal): https://incometaxindia.gov.in/Pages/acts/income-tax-act.aspx

7) Income-tax Act – VDA definition (Sec 2(47A)) (Income-tax portal): https://incometaxindia.gov.in/Pages/acts/income-tax-act.aspx

8) Income-tax Act – Sec 115BBH (India Code): https://www.indiacode.nic.in/handle/123456789/2148

9) Income-tax Act – Sec 194S (India Code): https://www.indiacode.nic.in/handle/123456789/2148

10) Finance Bill 2022 (effective dates, insertion notes): https://www.indiabudget.gov.in/budget2022-23/doc/Finance_Bill.pdf

11) CBDT Circular 13/2022 (194S guidelines): https://incometaxindia.gov.in/communications/circular/circular-no-13-2022.pdf

12) Income-tax tutorial (194S summary; updated): https://incometaxindia.gov.in/tutorials/72.tds-on-payment-for-the-transfer-of-virtual-digital-assets.pdf

13) CBIC GST rate schedule showing playing cards HSN 9504 40 00 @ 12%: https://cbic-gst.gov.in/gst-goods-services-rates.html

14) CGST Act 2017 – registration threshold base (Sec 22) (India Code): https://www.indiacode.nic.in/handle/123456789/15027

15) GST threshold enhancement to ₹40 lakh – policy release (PIB): https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1565919

16) GST threshold – notification listing (GST Council): https://gstcouncil.gov.in/notifications

17) Toy import duty policy context (PIB/Budget 2020): https://pib.gov.in/PressReleasePage.aspx?PRID=1602767

18) IRS Topic 409 – collectibles taxed up to 28%: https://www.irs.gov/taxtopics/tc409

19) IRS Notice 2023-27 (NFTs & “look-through” collectible analysis): https://www.irs.gov/pub/irs-drop/n-23-27.pdf

20) UK GOV.UK – CGT on personal possessions: https://www.gov.uk/capital-gains-tax-personal-possessions

21) HMRC internal manual – chattels £6,000 rule: https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg76870

22) MeitY – Digital India Act consultation: https://www.meity.gov.in/digital-india-act-2023

23) Market sizing (Straits Research – India collectible card game market): https://straitsresearch.com/report/collectible-card-game-market/india

24) Market sizing (Grand View Research – India trading card game market): https://www.grandviewresearch.com/horizon/outlook/trading-card-game-market/india

25) GST on NFTs ambiguity (Taxmann commentary): https://www.taxmann.com/post/blog/gst-on-nft-and-crypto/

26) OECD – Crypto-Asset Reporting Framework (CARF) PDF: https://www.oecd.org/tax/exchange-of-tax-information/crypto-asset-reporting-framework.pdf