Silver Rates In India Rally 175% In 2 Yrs; Income Tax Rates On Gains From Silver Investments, TDS To GST Rate

Silver rates in India continued to hit new record highs on December 22, 2025. This precious metal has gained nearly 16.5% in December alone, after surging by 21% in November. The year 2025 has belonged to silver, which has outperformed its counterpart, gold, as well. But to long-term investors, silver has only made investors richer. This is because in a little over 6 months, silver skyrocketed by 100%, and its 2-year performance is also robust, at more than 175%. There was a time when silver was just below Rs 80,000, but now it is at a whopping Rs 219,000 per 1 kg.

Investors who bought silver in post-Covid have the opportunity to cash in their gains. However, returns gained from silver investments are taxed on various parameters, and it is important that you are aware of it!

Silver Rates In India:

On December 22, the silver rate in India skyrocketed by Rs 5,000 to a new all-time high of Rs 219,000 per kg. The price of 100 grams and 10 grams silver stood at Rs 21,900 and Rs 2,190.

In major cities, the silver rate stood at Rs 231,000 per 1 kg in Chennai, Hyderabad, and Kerala. While silver rate was at Rs 219,000 in Bengaluru, Mumbai, Delhi, Kolkata, Pune, Ahmedabad, and Vadodara, among others.

But did you know around 6 months ago, silver was just at Rs 110,000 on June 23, 2025? From this level, silver has given a whopping 99.09% return as of now.

And if that is not enough, two years ago, silver was at Rs 79,500 per 1 kg on December 21, 2023. Since then, 1 kg of silver has given a gobsmacking 175.47%, or Rs 139,500, return to investors.

However, investors who are planning to cash their profits should understand these tax rates, which are applied to silver during purchases and sales.

Income Tax Rates On Silver Investments:

Anita Basrur, Partner, Sudit K. Parekh & Co. LLP answered various tax-related queries on silver investment to GoodReturns. Here are the excerpts from the interview.

"The tax rules for silver are not always straightforward and can depend on whether you hold physical silver (in the form of jewellery, bars, coins) or Silver ETF and the period of holding. Hence, understanding the tax implications is crucial for making informed investment decisions and ensuring proper compliance," Basrur told GoodReturns.

1. What is the taxability on earnings from physical silver (jewellery, bar, coins). Are tax rules different for silver if bought before April 1, 2023:

At the outset, it is important to note that from 1st April 2023, in case of specified mutual funds, the daistinction between long term and short term capital gains has been done away with. This is mainly in respect of debt funds and few other funds with less than 35% investment in domestic equity.

Coming to taxability of silver, if physical silver is sold within 24 months, the capital gain on such sale will be treated as Short-Term and would get taxed at slab rate. In case these are held for more than 24 months, the gain on such sale would be treated as Long-Term Capital Gains. Further if it is purchased on or after 23rd July 2024, the same will be taxed @ 12.5% without indexation benefit and if purchased prior taxation would be @20% with indexation.

2. If earnings are from silver ETFs and mutual funds, is there any TDS applicable on large transactions from selling silver?

Silver ETFs & Mutual Funds (if invested in equity) sold within 12 months are considered as Short Term Capital Gains and taxed at slab rates and otherwise Long Term Capital Gain and taxed @12.5% without indexation.

Typically TDS does not get attracted on sale of silver in any form. However, TDS provisions can be triggered in case of payments to non-residents under section 195, depending on the tax treaty and nature of income earned by such person. Also, in some cases TDS provisions could get attracted u/s 194Q if value exceeds ₹50 lacs and the turnover of the buyer exceeds ₹ 10 crores.

3. What is GST on silver jewellery, bar and coins?

- 3% GST on value of metal i.e. in the form of bar or coin or jewellery; and
- 5% on making charges of jewellery

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