Feb 18, 2026, Posted by Admin
Tax on Selling Gold & Silver in India
Tax on Selling Gold & Silver in India: Physical Gold, ETFs, and Gold & Silver Bees Explained
Gold and silver are among the most preferred investment options in India—whether held as physical jewellery/coins, Gold or Silver ETFs, or Gold & Silver Bees (Benchmark Exchange Traded Schemes).
However, many taxpayers are unaware that selling gold or silver attracts capital gains tax, and the tax treatment varies based on the mode of investment and holding period.
This article explains how tax is calculated on selling physical gold, silver, ETFs, and BeES, with simple examples—helpful for taxpayers, investors, and CA professionals alike.
Types of Gold & Silver Investments Covered
Before understanding taxation, let’s classify the investment types:
- Physical Gold & Silver
- Jewellery
- Coins
- Bars
- Paper / Market-linked Investments
- Gold ETFs
- Silver ETFs
- Gold Bees
- Silver bees
Note: From a tax perspective, Gold ETFs and Gold Bees are treated similarly, and the same applies to silver.
Capital Gains Tax on Selling Gold & Silver
Tax on gold and silver is governed by capital gains provisions under the Income Tax Act, 1961.
Holding Period Rule (Updated)
|
Investment Type |
Short-Term |
Long-Term |
|
Physical Gold & Silver |
Up to 24 months |
More than 24 months |
|
Gold / Silver ETFs & bees |
Up to 24 months |
More than 24 months |
Tax on Short-Term Capital Gains (STCG)
If gold or silver is sold within 24 months of purchase:
- Gains are treated as Short-Term Capital Gains
- Taxed at slab rate applicable to the taxpayer
- No indexation benefits available
Example:
Mr. A (30% tax slab) sells gold jewellery within 1 year and earns a gain of ₹1,00,000.
Tax payable = ₹30,000 + cess
Tax on Long-Term Capital Gains (LTCG)
If gold or silver is sold after 24 months:
- Gains are treated as Long-Term Capital Gains
- Tax rate: 20% with indexation
- Indexation reduces taxable gains significantly
Example:
Purchase price (indexed): ₹3,50,000
Sale price: ₹5,00,000
LTCG = ₹1,50,000
Tax = 20% of ₹1,50,000 = ₹30,000 + cess
Taxation of Gold ETFs, Silver ETFs & bees
From a tax point of view:
- Gold ETFs = Gold Bees
- Silver ETFs = Silver Bees
Key Points:
- Capital gains rules same as physical gold
- Holding period of 24 months
- LTCG taxed at 20% with indexation
- STCG taxed as per income tax slab
Even though ETFs are traded on stock exchanges, they are NOT taxed like equity shares.
Securities Transaction Tax (STT) on Gold & Silver ETFs
- STT is not applicable on Gold or Silver ETFs
- This makes them different from equity shares
Tax on Selling Gold Jewellery Inherited or Gifted
- Cost of acquisition = Cost to previous owner
- Holding period includes period held by previous owner
- LTCG benefits can be claimed if total holding exceeds 24 months
Important Compliance Tips for Taxpayers
- Maintain purchase invoices for physical gold
- Keep broker statements for ETFs and BeES
- Use Cost Inflation Index (CII) correctly for indexation
- Report gains under Schedule CG in Income Tax Return
Internal Linking Suggestions (For Better SEO)
For CA or tax websites, internally link this article with:
- ???? Taxation of Capital Gains in India
- ???? Income Tax on Mutual Funds vs ETFs
- ???? Capital Gains Exemption under Sections 54, 54F & 54EC
- ???? Cost Inflation Index (CII) Chart – Latest Updated
These links improve topical authority and Google rankings.
Conclusion
Whether you invest in physical gold and silver or prefer ETFs and BeES, taxation cannot be ignored.
The key factors determining tax liability are holding period, nature of asset, and applicable capital gains rate. With 20% LTCG tax and indexation benefits, long-term investors can significantly reduce tax outgo.
For high-value transactions, proper tax planning and documentation is essential. Consulting a Chartered Accountant ensures accurate reporting and compliance under the Income Tax Act.
Frequently Asked Questions (FAQs)
1. Is selling gold taxable in India?
Yes, profit from selling gold or silver is taxable under capital gains tax.
2. What is the holding period for LTCG on gold?
More than 24 months for physical gold, ETFs, and BeES.
3. Are Gold ETFs taxed like shares?
No. Gold ETFs and BeES are taxed like non-equity capital assets, not equity shares.
4. Can indexation benefit be claimed on gold?
Yes, indexation benefit is available for LTCG on gold and silver.
5. Is tax deducted at source (TDS) on selling gold?
Generally no TDS, unless specified under special circumstances.
6. How is inherited gold taxed?
Capital gains are calculated using previous owner’s cost and holding period.
If you want, I can also:
- Rewrite this in simpler language for students
- Convert it into a news-style article
- Optimize it further for featured snippets
- Add tables, charts, or case studies
Share On:
