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Silver surged over 70 percent in 2025. Tax on gains varies by holding period and form, with TDS rules for large transactions.
Silver can be bought in physical form or in digital form like ETFs.
Tax On Silver: Silver has remained one of the best performing assets of 2025, with a phenomenal rally taking the return over 70 per cent year-to-date. Silver rally was coincided with gold due to favorable cues like supply-demand gap, positive gold-to-silver ratio and macroeconomic instability.
The demand for silver jewellery reached its peak in India during Diwali festival amid the sky touching prices of gold dissuading consumers. The next best option in jewellery for consumer was silver. The demand coinciding with China’s week-long holiday was so high that London silver market faced extreme stress with the liquidity being dried up and borrowing rates soaring to 200 per cent annualized.
The Bloomberg News report added that India’s largest precious metals refinery, MMTC-Pamp, exhausted silver stock for the first time ever in the history. Silver shortage has prompted bidding wars among dealers.
Demand for Silver ETFs is soaring in the country due to this phenomenal rally.
Investors are also putting their money into silver through physical one like bars and coins.
Whether you invest in physical forms such as jewellery, coins, or bars, or through paper and digital modes like Exchange-Traded Funds (ETFs), your profits are taxable.
Here’s a detailed look at how gains on gold silver are taxed in India, along with the rules for ETFs and TDS applicability.
1. Tax on Physical Silver
Physical silver held for up to 24 months attracts short-term capital gains tax as per the individual’s income slab, while holdings beyond 24 months are taxed at a flat 12.5% rate without indexation.
2. Silver ETFs
Silver ETFs and mutual funds held for up to 12 months are taxed at the slab rate, while holdings over 12 months face 12.5% LTCG tax, also without indexation.
Held for less than 24 months: Gains are considered short-term and taxed as per your income tax slab.
Held for more than 24 months: Gains qualify as long-term and are taxed at 12.5%.
4. Digital Silver
Many investors today buy “digital gold” or “digital silver” through fintech apps. The tax treatment is the same as physical gold —
Less than 24 months: Taxed as per slab (STCG).
More than 24 months: Taxed at 12.5% (LTCG).
5. Tax Deducted at Source (TDS) Rules
TDS applies when you sell physical silver above certain limits or make large purchases:
On Sale: If you sell gold or silver worth more than Rs 50 lakh in a financial year to a buyer required to deduct tax (like a jeweller), TDS of 1% may be deducted on the sale consideration.
On Purchase: From July 1, 2021, if you buy gold worth more than Rs 10 lakh in cash, TDS/TCS (Tax Collected at Source) of 1% applies, and PAN/Aadhaar details are mandatory.
6. Gifts and Inherited Silver
If you receive silver as a gift, it is taxable if the total value of gifts received during the financial year exceeds Rs 50,000, unless received from a relative or on occasions like marriage.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
October 24, 2025, 11:19 IST
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