Silver price hit an all-time high on Tuesday, October 14, boosted by a historic short squeeze in London and strong demand for safe-haven assets amid global economic uncertainty. Spot silver rose as much as 0.4 per cent to $52.58 an ounce in London, breaking the previous record set in January 1980 when the billionaire Hunt brothers tried to corner the market.
The rally in silver comes amid concerns over liquidity in the London market, which has triggered a worldwide rush to secure the metal.
Also Read: Gold & Silver price hits record high—Buy, book profit or wait? Check key levels & strategy
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Do you know how to invest in silver or how gains from white metal are taxed? If you are thinking of buying silver for investment purposes, this article is for you. We will explain everything here. Take a look:
Ways to buy silver
Physical form: You can buy white metal in physical form, like coins and bars. It requires secure storage. You can also buy jewellery and silverware.
Digital form: The second way to buy silver is through digital platforms like PhonePe, MMTC-PAMP, DigiGold, myDigiSilver, and eBullion. Here you can buy and sell silver digitally.
Paper form: You can also buy silver ETFs (Exchange Traded Funds). ETFs are mutual fund schemes that invest in physical silver and related instruments. Silver futures and silver mutual funds also come under paper form of buying silver.
How are gains from silver taxed?
Silver ETF: If you hold silver ETFs for more than 12 months, there will be a tax of 12.5 per cent as it is considered long-term capital gains (LTCG). On the other hand, if they are held for less than a year, they are taxed as per your income tax slab. There is no GST on ETFs, but you will have to pay brokerage charges, SEBI fees, and exchange levies.
Physical silver: If you hold them for more than 24 months, then they are taxed at 12.5 per cent. However, they will be considered and taxed as STCG (short-term capital gains) if sold before 24 months. Physical silver also attracts 3 per cent GST, and if you are buying jewellery, you will need to pay making charges.
Digital silver: Digital silver also attracts 3 per cent GST and you may also need to pay storage charges and transaction spreads while buying and selling the silver.
FAQs
Is there a tax on silver?
Yes, when buying silver, you may have to pay GST and other charges, depending on the form of silver.
Ways to buy silver?
You can buy silver in physical form, ETFs and digital form.
Is capital gain applicable to the sale of jewellery?
Yes, it depends on the time period, how long you have owned the jewellery.
Is there a GST on silver?
Yes, silver also attracts 3 per cent GST like gold.