As the Indian art market matures and valuations increase, the informal nature of the trade makes an exit - it suddenly needs a more formal approach. A realization that “Law” is important and that transactions need to be compliant with the law, else they will cause problems for future follow-on transactions
The Indian art market has quietly stopped being a small, insider's game. Auction results keep climbing. M.F. Husain's Untitled (Gram Yatra) sold for Rs 118 crore (USD 13.8 million) at Christie's New York in March 2025, and that's the highest price any Indian painting has ever fetched at auction. A new generation of collectors, including a growing number of NRIs and family offices, are treating art less like a passion project and more like a genuine asset class. The trade itself, however, hasn't caught up. For decades it has run almost entirely on trust: a phone call, a handshake, occasionally an invoice written up well after the fact. That worked when paintings changed hands between people who knew each other and the sums involved were modest. It doesn't work at this scale.
The numbers back this up. According to Grant Thornton Bharat and Indian Art Investor's State of the Indian Art Market Report, auction turnover alone grew 265 percent between FY 2013 and FY 2023, and stood at roughly Rs 1,620 crore (about USD 193 million) for FY 2024-25. Industry estimates of the market's full size, including private and gallery sales, run considerably higher, and keep climbing.
The uncomfortable truth is that a transaction done carelessly today doesn't just create a paperwork headache. It quietly breaks every transaction that comes after it, the moment that same work needs to be resold, insured, gifted, or passed down to the next generation.
This piece looks at four places where that risk actually shows up in practice: who can genuinely claim ownership of a work and how that claim gets proved, what happens when a piece turns out to be a fake, who actually owns the right to reproduce or digitise a work once it's sold, and how Indian tax law treats art as an investment. None of this is theoretical. As an auction house that has watched the numbers on our own catalogues climb year after year, we've also watched the legal gaps around those numbers grow just as fast, and it felt like the right time to put something on paper about it, alongside a lawyer who has spent his career thinking about exactly these questions.
TITLE AND PROVENANCE CHAIN
Art ownership problems work almost exactly like real estate ownership problems. In overseas markets, this is well understood; buyers can even purchase title insurance to protect against a defect in a property’s history surfacing later. Indian real estate law was reminded of this only recently. In Mahnoor Fatima Imran v. Visweswara Infrastructure Pvt. Ltd. (2025), the Supreme Court held that even a registered sale deed does not, by itself, prove that the buyer actually owns the property. If that is the standard for real estate, with its public registration system, stamp duty records and decades of paper trail behind it, it should give any art buyer relying on a single invoice real pause.
The issues are similar in art. The transfer from a seller to the buyer must be documented with a bill of sale that describes the artwork, including an image, the sale price, details of the buyer and seller, and clearly states “Invoice” or “Bill of Sale”.
SHOULD THERE BE A REGISTRY FOR ART/ A GOVERNMENT REGULATED AUCTION HOUSE?
There is a working answer to that question elsewhere in the world. The UK's Art Loss Register has run a private database of stolen and disputed art since 1991, and dealers, auction houses and insurers routinely check against it before a major sale goes through. India already has a version of this logic for anything old enough to count as an antiquity, since the Antiquities and Art Treasures Act requires registration under Section 14 before such a piece can change hands. What is missing is the same discipline applied to everything younger, which is most of what actually trades in the Indian market today.
It is worth being precise about what the AATA actually covers, since the two categories are often used loosely. An “antiquity” is anything at least 100 years old (75 years for manuscripts and records), which qualifies automatically on age alone. An “art treasure” is different: it is a work the Central Government has specifically notified as such for its artistic value, and, tellingly, a work can never be declared an art treasure while its creator is still alive. The Act also requires anyone trading in antiquities to hold a dealer's licence and keep proper records and photographs of everything that passes through their hands, a requirement that sits squarely on auction houses and dealers, not just private collectors.
In real estate, a lawyer doesn't just look at the seller's sale deed. They trace the property backwards through every transfer for the last thirty years, checking each link for defects before the current one is signed off.
In art, that discipline simply doesn't exist. Almost every transaction in India is backed by nothing more than the immediate seller's invoice, with no attempt to establish who owned the work before that, let alone a documented history going back to the artist's studio. It can no longer be argued that real estate deserves this rigour, given that it's the higher-value asset class. Individual paintings by Indian modern masters now sell for upwards of Rs 150 crores at auction, and that number keeps climbing. An asset trading at that scale cannot continue to rely on a single sheet of paper as its sole proof of ownership.
Indian courts have made a version of this same point closer to home, even if not through a single named art case. Where individuals or institutions have claimed ownership of heritage objects, temple antiquities in particular, through long, uninterrupted possession, the higher courts have consistently applied strict scrutiny to those claims rather than letting informal possession defeat the public interest in cultural heritage. That principle runs alongside the AATA's own power to compel surrender of a privately held antiquity to the state, regardless of how long someone has quietly held onto it.
“Possession is 9/10s of the law” is just an adage, it does not hold legally.
Case Law Examples
Reif v. Nagy (NY Supreme Court, 2018, affirmed 2019)
In Reif v. Nagy (2018), the New York court ordered art dealer Richard Nagy to return two Egon Schiele drawings from Austrian cabaret performer Fritz Grünbaum's collection to his heirs. The court rejected Nagy's defense that Grünbaum's sister-in-law had legitimately inherited and sold the works after WWII, finding instead that Grünbaum was coerced into signing a power of attorney while imprisoned in Dachau. Because this forced transfer constituted Nazi theft rather than a valid conveyance, no subsequent possessor, including the sister-in-law or down-the-line Swiss galleries, ever acquired clean legal title. For collectors and investors, the case illustrates the critical danger of an unverified link in a provenance chain, demonstrating how a common "family sale" narrative can collapse under judicial scrutiny and invalidate ownership claims decades later.
FORGERIES
This is the elephant in the room and a more likely event than a title defect. It is tricky; at the end of the day, the law will rely on expert testimony. Generally, buying in transparent markets drastically reduces the chance of getting stuck with a lemon, as the auctioneer and other collectors would have given their watchful eyes to the work. Of course, an auctioneer is expected to do a lot more, including making sure the title/provenance chain is correct and that condition issues are documented beforehand.
What is the recourse here? The case law has only started to build up.
KPMG India and FICCI's report Visual Arts Industry in India: Painting the Future estimated that roughly Rs 8.1 billion worth of forged art trades in India every year.
Closer to home, an Indian buyer isn't limited to waiting for that case law to catch up. Where a work is bought from a dealer, gallery or auction house acting in the ordinary course of its business, the Consumer Protection Act, 2019 gives the buyer a real, accessible route, treating a misdescribed or inauthentic work much like a defective product or an unfair trade practice. It's a far quicker and cheaper avenue than civil litigation, and one worth knowing about before assuming a fight over a fake has to look like Knoedler or Thwaytes.
Case Law examples
De Sole v. Knoedler Gallery (SDNY, settled 2016)
For over 165 years, the historic Knoedler Gallery was an undisputed cornerstone of the New York art world until its sudden closure in 2011 exposed a massive art fraud scheme involving over 40 forged works by Abstract Expressionist masters like Jackson Pollock, Mark Rothko, and Willem de Kooning. Sourced by independent dealer Glafira Rosales under the guise of an anonymous Mexican collector, the paintings were actually created in Queens by artist Pei Shen Qian and artificially aged before being sold to top collectors for millions. The resulting lawsuits accused Knoedler and its leadership of willfully ignoring blatant provenance gaps and procedural red flags, ultimately settling out of court but leaving a lasting legacy in art law. This scandal stands as a primary case study in provenance fatigue, proving to investors and collectors that even a century and a half of gallery prestige cannot substitute for a verified paper trail.
Thwaytes v. Sotheby's (English High Court, 2015)
A second case addressing the auctioneer's own duty
In Thwaytes v. Sotheby's (2015), the English High Court addressed the standard of care an auction house owes to a consignor after Lancelot Thwaytes sued Sotheby's for negligence when a copy of Caravaggio's The Cardsharps, sold through them for £42,000, was later declared an original Caravaggio insured for £10 million by buyer Sir Denis Mahon. Although the court dismissed the claim, it established that a premier international auction house owes a higher legal standard of care than a provincial firm due to the specialized expertise and resources it holds itself out as possessing. Nevertheless, Sotheby's was found to have fulfilled its duty because its specialists had examined the work, applied sound scholarship, and reached a defensible professional judgment, affirming that auctioneers are not required to achieve absolute certainty or guarantee future market consensus, but only to exercise reasonable skill and care aligned with their standing.
TAKING ART ACROSS BORDERS
What happens the moment a work tries to leave the country is a question most collectors never ask until it is too late. The Antiquities and Art Treasures Act requires an export certificate before anything classified as an antiquity, meaning generally anything over 100 years old, can lawfully leave India, and moving it without one is a criminal offence, not a customs technicality. The genuinely tricky part is everything younger than that. India has no equivalent, clearly codified export clearance regime for a contemporary or modern Indian masterwork, which leaves collectors, NRIs, and auction houses making judgment calls in a grey zone every time a significant piece is consigned to an international sale. Given how much of the serious Indian art market now moves through London and New York, this is arguably as live a risk for a seller today as a defect in title, and probably deserves its own line in any advice a collector receives before consigning a work abroad.
This isn't a hypothetical risk. The Sripuranthan Nataraja, a bronze idol smuggled out of Tamil Nadu in 2006, spent eight years in the international market, including a stop in a major museum collection, before being traced back to art dealer Subhash Kapoor's trafficking network and finally returned to India in 2014. It's a useful reminder that export risk isn't just a paperwork question sitting quietly in the background; it can resurface as a live legal problem for a buyer years, sometimes decades, after the sale.
India's own Ministry of Commerce trade data (via Trading Economics) shows art and antiques imports at USD 87.4 million in 2023 (down from USD 145.2 million in 2022) and exports at USD 64.5 million in 2023.
DIGITAL ASSETS/COPYRIGHT
It surprises many that the image in the artwork hanging on their walls is protected by copyright and cannot be used commercially by the owner of the artwork. There are fair-use exceptions, such as auction listings, exhibition catalogs, and cataloging someone's personal collection. This has gained prime importance with the advent of digital versions and blockchain-based art. The gallery model is itself changing with digital and immersive shows, which are becoming extremely popular.
Copyright laws and personality laws are all very tricky.
This isn't just a theoretical concern for the Indian market either. Amitabh Bachchan's Madhushala poetry NFT collection sold for USD 756,000 (about Rs 5.5 crore). His entire digital NFT collection auction in November 2021 totaled USD 966,000 (about Rs 7.18 crore), setting a record for NFT sales in India. Real money changing hands for digital works in a space where Indian law has no bespoke framework at all. An NFT can itself be counterfeited, and the person who mints a token isn't necessarily the actual creator of the underlying artwork, which adds a whole extra layer of provenance risk on top of everything already discussed for physical works.
Case Law examples
Amar Nath Sehgal v. Union of India (Delhi HC, 2005)
The government commissioned sculptor Amar Nath Sehgal to build a massive bronze mural for Vigyan Bhawan in 1957, then tore it down during a 1979 renovation without telling him, leaving it damaged in storage. Sehgal sued under Section 57 of the Copyright Act and won after thirteen years, with the court holding that moral rights survive the sale of a work and even its copyright, and belong to the artist personally. The government was ordered to return the remnants of the mural to him permanently. This remains India's foundational moral rights judgment and the benchmark every later Section 57 case is measured against.
Hermès International v. Mason Rothschild (SDNY, 2023)
In late 2021, artist Mason Rothschild created and sold a collection of 100 "MetaBirkins" NFTs depicting fuzzy digital versions of Hermès's iconic Birkin bag as an alleged critique of luxury and fashion's excess, but Hermès sued for trademark infringement in the first case of its kind to reach a jury verdict. The jury ultimately sided with Hermès, awarding over $130,000 in damages after finding that the NFTs were commercial products trading directly on a famous brand's goodwill rather than protected artistic expression. What makes this case so critical for anyone building or investing in digital art is not that it bans NFTs or brand references entirely, but that it proves minting digital items for profit does not automatically shield them under traditional free-speech protections for appropriation art, drawing a much thinner line between creative commentary and commerce than the web3 space had assumed.
B.K. Polimex India (P) Ltd. v. Union of India (Bombay HC, 2024)
Customs authorities seized a folio of nude drawings, four by F.N. Souza and three by Akbar Padamsee, both major figures of the Progressive Artists' Group, on obscenity grounds. The Bombay High Court held that a nude painting cannot be automatically classified as obscene, and that authorities must weigh the artist's standing and reputation, expert opinion, and judicial precedent before making that call. The case matters for two reasons: it applied general obscenity law specifically to fine art for the first time, and it confirmed such works remain independently protected as "artistic works" under the Copyright Act regardless of any parallel customs dispute.
Bridgeman Art Library v. Corel Corp. (SDNY, 1999)
This ruling established that faithful photographs of two-dimensional public-domain artworks lack the necessary independent creativity to claim a new copyright, regardless of how much technical effort or expert lighting goes into capturing them. For an auction house or gallery digitizing a collection, this principle serves as a critical boundary line alongside the foundational Indian Supreme Court ruling in R.G. Anand v. Delux Films (1978), which enshrined the idea-expression dichotomy by holding that copyright protects only the original expression of an idea rather than the underlying idea itself. Taken together, these precedents clarify that making an exact copy of an out-of-copyright masterpiece creates no proprietary right. To secure copyright protection, an institution must contribute genuinely original effort, such as distinct catalogue essays, creative photograph angles, or novel curatorial arrangements.
R.G. Anand v. Delux Films (Supreme Court, 1978)
Not an art case on its face, but foundational for one anyway. The Supreme Court established the idea-expression dichotomy here, the rule that copyright protects the expression of an idea, not the idea itself, along with the "substance and essence" test for working out when one work infringes another. This principle applies directly whenever two artists produce similar compositions, motifs or subject matter, since the question is never whether the idea was shared; it's whether the expression was actually copied.
Eastern Book Company v. D.B. Modak (Supreme Court, 2008)
Another non-art case with real bite for visual art. The Supreme Court set India's originality threshold here, a "modicum of creativity," meaning a work has to show at least some independent skill and judgment to earn its own copyright, not just labour or reproduction. This matters directly for derivative or minimally transformative artistic works, including photography-based pieces, since it's the test that decides whether that kind of work qualifies for protection at all.
RESALE RIGHTS, AND WHY THEY RARELY GET PAID
There is one more provision in the Copyright Act that an auction house should know well, since it touches on commission practice directly rather than just the collector's side of a sale. Section 53A gives an artist, and their heirs after death, a right to a share of the resale price whenever an original painting, sculpture, drawing or manuscript resells for more than Rs 10,000, provided the seller isn't the original artist. The share is capped at 10 percent of the resale price.
In practice, this right is close to a dead letter in India. Auction houses and dealers rarely remit it, artists and their heirs rarely assert it, and Section 63 of the same Act, which otherwise makes copyright infringement a criminal offence, specifically carves out dealers from penal liability for withholding it. That's a sharp contrast to France, where the equivalent right is inalienable, or Australia, which built a dedicated collecting society just to administer it. For any Indian auction house, this is worth treating as more than a footnote; it's a right that exists clearly on paper and functions poorly in practice, and getting ahead of it before a regulator or an artist's estate does is simply good housekeeping.
TAXATION
Art is treated as a capital asset under Indian tax law, in the same category as jewellery, archaeological collections and bullion, and specifically excluded from the personal effects exemption that shelters things like your car or furniture from capital gains tax.
Long-term versus short-term
Since the changes introduced by the Finance Act of 2024, an artwork held for more than 24 months qualifies for long-term capital gains tax at a flat 12.5 percent without indexation benefits for transfers after 23 July 2024, whereas sales within 24 months are treated as short-term capital gains taxed at the collector's ordinary slab rate. For works acquired before 23 July 2024, sellers are protected by a grandfathering carve-out that allows them to choose between 12.5 percent with no indexation or 20 percent with indexation restored, selecting whichever option produces the lower tax bill, a crucial distinction for long-established Indian art collections. Adding to these domestic tax considerations, importing artwork into India incurs a separate customs duty on top of GST and capital gains regardless of whether the work is intended for a private collection, gallery exhibition, or consignment sale, making early financial planning essential.
Netting gains against losses
Like most capital assets, art losses cannot be set off against general income, meaning short-term capital losses can absorb both short-term and long-term capital gains in the same year, whereas long-term capital losses offset only long-term capital gains. Unused losses may be carried forward for eight assessment years if properly disclosed in that year's tax return, making portfolio-wide disposal planning essential for active collectors. Parallel to capital gains, auction houses must navigate GST compliance, which taxes the artwork itself separately from services: while the GST on original paintings was reduced from 12 to 5 percent in September 2025, the buyer's premium remains taxed at the standard 18 percent service rate. This creates a dual-tax structure for buyers that becomes even more nuanced in cross-border sales, where GST applicability varies between domestic and export consignments.
“You Need A Good Lawyer.”
Every issue above- title, forgery, copyright, and tax- has one thing in common: it is far cheaper to get right before the transaction than to fix afterwards. Introducing my good friend Vismay Shroff, Esq a real estate lawyer, an art collector, and an early lawyer in the field of art.
Adv Vismay Shroff, ESQ
Advocate & Professor Vismay K. Shroff is a commercial advocate at Parimal K. Shroff & Co., a professor of law at Government Law College, Mumbai, and one of the earliest Indian lawyers to build a genuine practice around art law specifically. He holds a Master's degree in International and Intellectual Property Law from Duke University School of Law, has practised and taught in the field for close to two decades, and is the author of Infrastructure Law and Practice. His combination of real estate discipline, IP expertise and personal experience as a collector is precisely the mix this area of practice demands.
Parimal K. Shroff & Co.
Parimal K. Shroff & Co. is a Mumbai-based boutique law firm specialising in property law, infrastructure and dispute resolution, built over several decades under its founder Adv Parimal K. Shroff. The firm is consistently ranked by Chambers and Partners for the depth of its real estate practice, acting for developers across transactional and contentious matters, and its grounding in title, chain of ownership and documentation issues in real estate translates directly to the questions collectors now face with art.
Contact us at:
Email: gallery@prinseps.com
Email: vismay@parimalshroff.com
29, Veer Nariman Road, 1st, Floor, Rustom Building, Fort, Mumbai 400023
Collecting art is a super hobby. Let's just do it safely.
