Guide
Tax on silver in India: GST and capital gains explained
Silver is taxed twice: GST when you buy it, and capital gains tax when you sell it for a profit. The rules differ for physical silver, silver ETFs and silver mutual funds.
On this page
Silver tax at a glance
| How you hold silver | Long-term after | Long-term tax | Short-term tax |
|---|---|---|---|
| Bars, coins, jewellery, utensils | 24 months | 12.5%, no indexation | Your slab rate |
| Silver ETF (listed) | 12 months | 12.5%, no indexation | Your slab rate |
| Silver fund of funds | 24 months | 12.5%, no indexation | Your slab rate |
| Digital silver (apps) | 24 months | 12.5%, no indexation | Your slab rate |
Plus 4% cess on the tax, and surcharge at higher incomes. Digital silver is taxed like physical silver because you own metal held by a vault on your behalf.
Tax when you buy: GST
Silver bars, coins and jewellery carry 3% GST. The silver rate on this site already includes it on the metal: today's 999 rate of ₹218.32 per gram is the international price plus 15% import duty plus 3% GST.
For jewellery bought from a shop, 3% GST applies to the whole bill, making charges included, because the sale is treated as one supply of goods. If you give your own silver to a craftsman and pay only for the work, that job work is a service and carries 5% GST.
Tax when you sell: capital gains
Your gain is the sale price minus the cost of buying, including GST and making charges if your invoice shows them. Whether it is short-term or long-term depends on how long you held the silver.
Example: physical silver
You bought a 1 kg bar for ₹92,000 in September 2024 and sell it for ₹2,20,000 in October 2026, after more than 24 months. The gain of ₹1,28,000 is long-term: tax is 12.5%, or ₹16,000, plus 4% cess (₹640), for ₹16,640 in total.
Example: silver ETF
You put ₹1,00,000 into a silver ETF and sell for ₹1,20,000 after 10 months. The ₹20,000 gain is short-term and is added to your income. In the 30% slab, the tax is ₹6,000 plus cess. Wait until after 12 months and the same gain would be taxed at 12.5%: ₹2,500 plus cess.
Try your own numbers in the capital gains tax calculator.
Other rules worth knowing
- PAN: needed for purchases above ₹2 lakh. Cash of ₹2 lakh or more in one transaction isn't allowed.
- Losses: a capital loss can be set off against capital gains; long-term losses only against long-term gains.
- Filing: report gains in the capital gains schedule of your income-tax return (ITR-2 or ITR-3, not ITR-1).
- Records: keep invoices with weight, purity and price. Jewellers' buy-back bills help prove the sale value.
Tax rules change with each Budget. This guide reflects the rules for sales on or after 23 July 2024; check with a tax adviser for your own case.
Frequently asked questions
How is a silver ETF taxed in India?
Units held for more than 12 months are long-term: the gain is taxed at 12.5% without indexation. Units sold within 12 months are short-term, and the gain is added to your income and taxed at your slab rate. The ₹1.25 lakh yearly exemption applies only to equity, not to silver ETFs.
How is a silver mutual fund or fund of funds taxed?
Silver funds of funds are not listed on an exchange, so they need more than 24 months to qualify as long-term. After that the gain is taxed at 12.5%; before that, at your slab rate.
Do I pay tax when I sell old silver jewellery?
Yes, on the gain: the sale price minus what you paid, including making charges and GST if you have the bill. Held for more than 24 months, the gain is taxed at 12.5%; otherwise at your slab rate. Keep the original invoice, because without it proving the cost is hard.
Is there GST on making charges for silver jewellery?
When you buy finished jewellery from a shop, 3% GST applies to the whole bill, making charges included. A 5% rate applies to job work, when you give your own silver to a craftsman and pay only for making it.
Is indexation available on silver?
Not for sales on or after 23 July 2024. Long-term gains are taxed at a flat 12.5% without indexation.
Is silver received as a gift taxed?
Gifts from relatives, and gifts received on your marriage, are not taxed. Gifts from non-relatives worth more than ₹50,000 in a year are taxed as income. When you later sell gifted silver, the giver's cost and holding period count as yours.
Sources
Rules and figures checked on 29 September 2026. Live prices update on this page automatically.