Taxation of Gold and Silver in India in 2026 Explained Simply

A simple and updated guide to taxation of gold and silver in India in 2026 covering physical, digital, ETF, mutual funds and SGB.

When we invest in gold or silver, we usually look at prices, returns, and safety. But there is one thing that silently affects our returns and is often ignored — tax. Understanding the Taxation of Gold and Silver in India in 2026 is extremely important because the rules have changed in recent years and many older articles online are outdated.

In this article, I will explain in simple language, as if explaining to a child:

• how gold and silver are taxed in 2026,
• what has changed recently,
• which form is more tax-efficient, and
• what mistakes you should avoid.

Taxation of Gold and Silver in India in 2026

1. Different ways to invest in gold and silver

You can invest in gold and silver in many forms today.

Gold:

• Physical gold (coins, bars, jewellery)
• Digital gold
• Gold ETFs
• Gold mutual funds / FoF
• Sovereign Gold Bonds (SGB)
• Gold futures

Silver:

• Physical silver (coins, bars, jewellery)
• Digital silver
• Silver ETFs
• Silver mutual funds / FoF
• Silver futures

Each of these is taxed differently.

2. GST on purchase

Whenever you buy physical or digital gold and silver, GST applies.

Form	GST
Physical gold/silver	3%
Jewellery	3% on metal + 5% on making
Digital gold/silver	3%
ETF / MF / SGB / Futures	Nil

So physical and digital forms have a higher upfront cost because of GST.

3. Capital gains — basic idea

Tax is paid when you sell gold or silver and make a profit.

Three factors matter:

• How long you held it
• What type of instrument it is
• Listed or unlisted

Holding period rules:

Instrument	STCG	LTCG
Physical/Digital gold & silver – Unlisted	Less than or equal to 24 months	More than 24 months
Gold/Silver ETF – Listed	Less than or equal to 12 months	More than 12 months
Gold/Silver MF (FoF) – Unlisted	Less than or equal to 24 months	More than 24 months
SGB – Listed	Less than or equal to 12 months	More than 12 months

You noticed that for the listed instruments, the holding period to arrive at LTCG or STCG is 12 months. But for unlisted instruments, it is 24 months.

4. Tax rates in 2026

Physical & Digital Gold and Silver

• STCG – taxed as per your income slab.
• LTCG – taxed at 12.5% without indexation.

Gold & Silver ETFs

• STCG – slab rate.
• LTCG – slab rate (no concessional benefit).

Gold & Silver Mutual Funds / FoF

• STCG – slab rate.
• LTCG – 12.5% without indexation.

Sovereign Gold Bonds (SGB)

• Sold on exchange – STCG slab / LTCG 12.5%.
• Redeemed with RBI at maturity – Fully tax-free capital gain.
• Yearly interest of 2.5% is taxable as per your slab rate

Futures

• Treated as business income.
• Taxed at slab rates.

5. Summary table

Instrument	GST	STCG if Sold Within	LTCG if Sold After	STCG Tax	LTCG Tax	Indexation	Notes
Physical Gold / Silver	3%	24 months	More than 24 months	Slab	12.5%	No	Includes coins, bars
Jewellery (Gold / Silver)	3% + 5% on making charges	24 months	More than 24 months	Slab	12.5%	No	Making charges extra
Digital Gold / Silver	3%	24 months	More than 24 months	Slab	12.5%	No	Same as physical
Gold / Silver ETF	No	12 months	More than 12 months	Slab	Slab	No	Listed security
Gold / Silver Mutual Fund (FoF)	No	24 months	More than 24 months	Slab	12.5%	No	Non-equity MF
SGB (sold on exchange)	No	12 months	More than 12 months	Slab	12.5%	No	Market sale
SGB (held till maturity)	No	—	—	—	Exempt	—	Only true tax-free gold
Gold / Silver Futures	No	—	—	Slab (business income)	—	No	Trading income

6. Simple examples

Example 1 — Physical gold
You buy gold for Rs.5 lakh and sell after 1 year for Rs.7 lakh.
Profit = Rs.2 lakh – Tax = taxed as per your tax slab.

Example 2 — Gold ETF
Same numbers but through ETF. You will be taxed at 12.5%
Tax = 12.5% of Rs.2 lakh = Rs.25,000.

Example 3 — SGB
Buy at Rs.5 lakh, redeem at maturity for Rs.8 lakh.
Profit = Rs.3 lakh – Tax = Rs.0.

Considering all these, SGBs are the best option for Gold. However, as no new issues are available, you must explore the existing SGBs through the secondary market. The next best options are ETFs, Mutual Funds, and Fund Of Funds. Exploring Gold and Silver in physical form is not a better way (in terms of tax, safekeeping, and if you look into the purity, making charges, and wastage).