Tax Tips: Buy and hold silver or ETF, and if sold, you'll have to pay this much tax to the government; check..

Silver investment tax: Silver's meteoric rise has surprised everyone. The metal's prices show no signs of stopping. As Dhanteras and Diwali approach, many Indians are turning to silver not only for tradition but also as a promising investment. While gold is making headlines with its rapid rise, silver is not far behind, steadily rising to new heights. Shopping for Dhanteras and Diwali is in full swing across India, with silver prices reaching new peaks in many cities. Amid rising prices, many mutual fund companies have suspended new investments in gold ETFs. However, some continue to invest in them. However, if you choose to buy gold or silver, you can buy these ETFs. After purchasing, if you hold it for a long time and sell it after a few years, you will also have to pay long-term capital gains tax on it.

Before we proceed further, let's understand the three main ways to invest in silver: physical silver (including coins, bars, and jewelry), digital silver (purchased through online platforms), and silver ETFs (traded on stock exchanges like mutual funds).

How much tax will be levied if silver is sold?
Silver ETFs are considered capital assets, and gains are classified based on the holding period. If held for 12 months or more, the gains are considered long-term capital gains (LTCG) and taxed at a rate of 12.5%. If held for less than 12 months, the gains are considered short-term capital gains (STCG) and taxed according to the investor's applicable income tax slab.

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

If sold before 24 months, the profit is taxed as STCG at slab rates. Additionally, physical silver purchases attract a 3% GST. In the case of jewelry, buyers also have to pay a making charge, which is subject to GST.

How much GST on gold and silver?
Gold and silver have historically been considered sensitive commodities, so the GST Council has retained the 3% rate on these metals. The unchanged tax rate on both metals provides clarity ahead of the festive and wedding seasons, a time when demand for bullion is culturally significant in India.

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