The options compared
| Form | What you own | Main costs | Main risks |
|---|---|---|---|
| Bars and coins | Physical silver | 3% GST, premium over the silver value, storage | Theft, purity doubts on resale, dealer buy-back deductions |
| Silver ETF | Units of a fund holding silver, traded on NSE/BSE | Expense ratio, brokerage | Price can differ from the silver value; tracking difference |
| Silver fund of funds | Units of a mutual fund that holds a silver ETF | Expense ratios of both funds | Same as the ETF; priced once a day |
| Digital silver on apps | A claim on silver held by the platform’s vault partner | 3% GST, platform spreads and charges | Not regulated by SEBI; depends on the platform |
| MCX silver futures | A leveraged contract on the price | Brokerage, exchange fees, margin | Losses can exceed the margin; for experienced traders |
Price risk
Silver prices swing more than gold prices, because the market is smaller and more than half of demand comes from industry. Large rises and large falls have both happened within single years.
How gains are taxed (FY 2026-27)
| How you hold it | Long-term after | Long-term rate | Short-term |
|---|---|---|---|
| Physical gold or silver (jewellery, coins, bars) | 24 months | 12.5%, no indexation | Your slab rate |
| Digital gold or silver bought on apps | 24 months | 12.5%, no indexation | Your slab rate |
| Gold or silver ETF (listed on NSE/BSE) | 12 months | 12.5%, no indexation | Your slab rate |
| Gold or silver mutual fund or fund of funds | 24 months | 12.5%, no indexation | Your slab rate |
Frequently asked questions
- Do silver ETFs charge GST?
- No GST is charged on buying ETF units. You pay brokerage and the fund’s expense ratio.
- Is digital silver regulated?
- No. SEBI has cautioned that digital gold and similar products sold on online platforms are outside its regulation.
- Is this page investment advice?
- No. It explains how prices, purity and taxes work, with sources. It does not recommend buying, selling or holding any product. See our Financial Disclaimer.
Sources
- The Week: SEBI flags unregulated digital gold (9 November 2025)
- HDFC Mutual Fund: gold and silver taxation leaflet
- Income Tax Department
- MCX: Multi Commodity Exchange of India
- CBIC: GST rates for goods
- The Silver Institute: silver market in deficit for fifth straight year
This guide explains rules and prices for general information. It is not investment, tax or legal advice. Duty and tax rules change; check the official source before you act. See our Financial Disclaimer and Corrections Policy.