Investing in silver this Dhanteras, Diwali 2025? Know how gains from silver are taxed

Over the past year, silver prices have risen by 48%, reflecting strong demand and positive market sentiment.

• Physical Silver: Coins, bars, and jewellery

• Digital Silver: Purchased via online platforms

• Silver ETFs: Traded on stock exchanges like mutual funds

But while buying silver during the festive season is considered auspicious, it’s equally important to understand the tax implications of those investments.

Silver is treated as a capital asset under Indian tax laws, similar to gold. This means that any profit from selling silver is taxed as capital gains, whether it’s held in physical form (like jewellery or coins) or in digital or ETF form.

The taxation depends on the holding period. The exact tax treatment depends on how long you hold the silver before selling it.

If held for less than 12 months, the gains are treated as short-term capital gains (STCG) and taxed as per the investor's applicable income tax slab.

ETFs do not attract GST on the underlying silver for the investor, but brokerage charges, SEBI fees, and exchange levies are applicable.

Physical silver, including coins, bars, and jewellery, follows a slightly longer holding period for LTCG classification. If held for 24 months or more, gains are taxed at 12.5%.

If sold before 24 months, the gains are taxed as STCG at slab rates. Additionally, buying physical silver attracts 3% GST. In the case of jewellery, buyers also incur making charges, which are subject to GST as well.

Digital silver, which is purchased in fractional amounts through apps and platforms, is taxed similarly to physical silver. A 3% GST is levied on digital silver purchases, and platforms may also charge storage fees or transaction spreads when buying and selling

Meanwhile, Tata Mutual Fund's silver outlook report suggested that silver may outperform gold in the medium term, driven by a favourable gold/silver ratio, recovery in developed economies, robust industrial demand-particularly from China-and projected global supply deficits.

It further explained that rising investment and industrial demand, coupled with recovery expectations in China, are positively influencing silver prices.