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:

1. Physical Gold & Silver

  i) Jewellery

  ii) Coins

  ii) Bars

2. Paper / Market-linked Investments

  i) Gold ETFs

  ii) Silver ETFs

  iii) Gold Bees

  iv) 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)

Tax on Short-Term Capital Gains (STCG)

If gold or silver is sold within 24 months of purchase:

  i) Gains are treated as Short-Term Capital Gains

  ii) Taxed at slab rate applicable to the taxpayer

  iii) 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:

  i) Gains are treated as Long-Term Capital Gains

  ii) Tax rate: 20% with indexation

  iii) 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:

  i) Gold ETFs = Gold Bees

  ii) Silver ETFs = Silver Bees

Key Points:

Capital gains rules same as physical gold

  i) Holding period of 24 months

  ii) LTCG taxed at 20% with indexation

  iii) STCG taxed as per income tax slab

  iv) Even though ETFs are traded on stock exchanges, they are NOT taxed like equity shares.

Securities Transaction Tax (STT) on Gold & Silver ETFs

  i) STT is not applicable on Gold or Silver ETFs

  ii) This makes them different from equity shares

Tax on Selling Gold Jewellery Inherited or Gifted

  i) Cost of acquisition = Cost to previous owner

  ii) Holding period includes period held by previous owner

  iii) LTCG benefits can be claimed if total holding exceeds 24 months

Important Compliance Tips for Taxpayers

  i) Maintain purchase invoices for physical gold

  ii) Keep broker statements for ETFs and BeES

  iii) Use Cost Inflation Index (CII) correctly for indexation 

  iv) Report gains under Schedule CG in Income Tax Return

.

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.

Share On: