Silver Hits Record High: Know Capital Gains Tax Rules Before Profiting This Dhanteras

As Dhanteras and Diwali approach, silver prices in India have surged to record highs. Over the past year, silver has gained nearly 90%, reaching ₹1,85,000 per kilogram. With the festive season prompting both traditional buyers and investors to flock to silver, understanding the tax implications on gains has become essential.

Ways to Invest in Silver

Investors can choose among various options:

Physical Silver: Coins, bars, and jewelry.

Digital Silver: Purchased via apps or online platforms.

Silver ETFs: Traded on stock exchanges like mutual funds.

Tax Rules on Silver Investments

Under Indian income tax laws, silver is considered a capital asset. Profits from selling silver are subject to Capital Gains Tax.

1. Physical Silver

• Long-term Capital Gains (LTCG): Holding silver coins, bars, or jewelry for 24 months or more attracts 12.5% LTCG tax.

• Short-term Capital Gains (STCG): Selling before 24 months is taxed as per income tax slab rates.

• Additional Costs: Buying physical silver incurs 3% GST and making charges with additional GST on jewelry.

2. Digital Silver

• Tax treatment is similar to physical silver.

• A 3% GST applies along with platform or storage fees.

3. Silver ETFs

• LTCG: Holding for 12 months or more incurs 12.5% LTCG tax.

• STCG: Selling before 12 months is taxed as per income tax slabs.

• No GST on the transaction, but brokerage, SEBI fees, and exchange charges apply.

Performance of Popular Silver ETFs

ETF Name 1-Year Return 3-Year Return

ICICI Prudential Silver	90%	199%
Axis Silver	102%	215%
Nippon India Silver	98%	208%
HDFC Silver	99%	217%
Aditya Birla Silver	100%	212%

Source: Groww

Key Takeaways

• Silver remains an attractive investment this Dhanteras, but tax planning is crucial.

• Physical silver comes with GST and making charges, which reduce net returns.

• Digital silver and ETFs provide easier liquidity and lower additional costs but are subject to capital gains tax.

• Holding periods determine whether long-term or short-term capital gains tax applies.

By understanding these tax rules, investors can make informed decisions and maximize their profits during the festive season while complying with income tax regulations.