Gold and silver ETFs are taxed on the gain you make when you sell. Held more than 12 months: the gain is long-term and taxed at 12.5%, without indexation. Held 12 months or less: the gain is added to your income and taxed at your slab rate. Gold and silver funds (funds of funds) must be held more than 24 months to be long-term.
This guide is for sales in the financial year 2025-26 (AY 2026-27), under the Income-tax Act, 1961. For equity funds and SIPs, see our guide to mutual fund taxation. For debt funds, see debt mutual fund taxation.
Gold and silver ETF tax at a glance
For sales in FY 2025-26:
| What you hold | Long-term if held for | Short-term gain | Long-term gain |
|---|---|---|---|
| Gold or silver ETF (listed on a stock exchange) | More than 12 months | Your slab rate | 12.5%, no indexation |
| Gold or silver fund of funds (not listed) | More than 24 months | Your slab rate | 12.5%, no indexation |
- There is no ₹1.25 lakh tax-free amount on these gains. That limit is only for equity shares and equity funds.
- Units bought on or after 1 April 2023 follow this same table when sold on or after 1 April 2025. Sales before that followed a different rule, explained below.
What is a gold ETF, a silver ETF and a gold fund?
- A gold ETF is a mutual fund that tracks the price of gold and invests in gold. Its units are listed and traded on the NSE and BSE, through a demat account and a broker. A silver ETF does the same for silver.
- A gold or silver fund of funds puts your money into gold or silver ETFs. You buy and redeem its units through the fund house. They are not listed on a stock exchange, so a longer holding period applies.
- For tax, none of these is an equity fund, because they do not hold 65% or more in Indian shares. So the equity rules, including the 20% rate on short-term gains and the ₹1.25 lakh limit, do not apply.
How gold ETFs are taxed
- Long-term if you held the units for more than 12 months. The gain is taxed at 12.5% under section 112, without indexation.
- Short-term if you held them for 12 months or less. The gain is added to your income and taxed at your slab rate.
- The gain is the sale value minus what you paid and the expenses of the sale, such as brokerage.
- The gain is taxed in the year you sell, not while you hold the units.
Example 1 (long-term). You bought gold ETF units on 12 August 2022 for ₹2,00,000 and sold them on 20 November 2025 for ₹2,60,000.
| Amount | |
|---|---|
| Sale value | ₹2,60,000 |
| Cost | ₹2,00,000 |
| Long-term capital gain | ₹60,000 |
| Tax at 12.5% | ₹7,500 |
| Health and education cess at 4% | ₹300 |
| Total tax | ₹7,800 |
The whole ₹60,000 is taxed. There is no ₹1.25 lakh tax-free amount for gold ETFs.
Example 2 (short-term). You bought gold ETF units on 5 May 2025 for ₹2,00,000 and sold them on 10 February 2026 for ₹2,40,000. Your other income puts you in the 30% slab.
| Amount | |
|---|---|
| Short-term capital gain | ₹40,000 |
| Tax at your 30% slab | ₹12,000 |
| Cess at 4% | ₹480 |
| Total tax | ₹12,480 |
Holding the units for more than 12 months gives a lower rate only if your slab rate is above 12.5%. If your total income, including the gain, is below the basic exemption limit, no tax is due on a short-term gain.
How gold mutual funds are taxed
A gold mutual fund here means a gold fund of funds, which invests in gold ETFs.
- Long-term only if you held the units for more than 24 months, because the units are not listed.
- Long-term gain: 12.5%, without indexation. Short-term gain: your slab rate.
- Each SIP instalment buys units on its own date, so each one has its own holding period.
Example 3 (gold ETF or gold fund, same dates). Two people each invest ₹3,00,000 on 10 September 2024. One buys a gold ETF, the other a gold fund of funds. Both sell on 15 December 2025 for ₹3,50,000, a gain of ₹50,000, after 15 months. Both are in the 30% slab.
| Gold ETF | Gold fund of funds | |
|---|---|---|
| Rule | Listed, held more than 12 months: long-term | Not listed, held 24 months or less: short-term |
| Tax rate | 12.5% | 30% (slab) |
| Tax | ₹6,250 | ₹15,000 |
| Cess at 4% | ₹250 | ₹600 |
| Total tax | ₹6,500 | ₹15,600 |
The tax rules are the same. Only the holding period needed to become long-term differs.
Silver ETF taxation in India
Silver ETFs and silver funds of funds follow the same rules as gold:
- Silver ETF (listed): long-term after more than 12 months, taxed at 12.5% without indexation. Short-term gains at your slab rate.
- Silver fund of funds (not listed): long-term after more than 24 months, same rates.
- No ₹1.25 lakh tax-free amount.
- Silver ETF units bought on or after 1 April 2023 follow the same rules when sold on or after 1 April 2025, as the next section explains.
Gold and silver ETFs bought between April 2023 and March 2025
From 1 April 2023, section 50AA said that the gain on units of certain funds bought on or after that date is always short-term, however long you hold them. Until FY 2024-25, it covered funds with 35% or less in Indian shares. Gold and silver ETFs and gold funds were such funds.
- Sold in FY 2023-24 or FY 2024-25: the gain on such units was short-term and taxed at your slab rate, even after years.
- Sold on or after 1 April 2025: section 50AA now covers only funds with more than 65% in debt. Gold and silver ETFs and funds are outside it. So the normal rules apply: long-term after 12 months (ETF) or 24 months (fund of funds), taxed at 12.5%.
Example 4 (same units, two sale dates). You bought gold ETF units in May 2023. When you sell, the gain is ₹80,000. You are in the 30% slab.
| Sold in February 2025 | Sold in October 2025 | |
|---|---|---|
| Rule | Section 50AA, always short-term | Listed, held more than 12 months: long-term |
| Tax rate | 30% (slab) | 12.5% |
| Tax | ₹24,000 | ₹10,000 |
| Cess at 4% | ₹960 | ₹400 |
| Total tax | ₹24,960 | ₹10,400 |
If a sale in an earlier year was left out of your return or shown wrongly, an updated return (ITR-U) may still be possible.
Gold ETF tax: what changed and when
| From | Change |
|---|---|
| 1 April 2023 | Gold and silver ETF and fund units bought from this date became always short-term (section 50AA) |
| 23 July 2024 | Long-term after 12 months (listed) or 24 months (not listed), was 36 months. Long-term rate 12.5% without indexation, was 20% with indexation |
| FY 2025-26 | Section 50AA narrowed to funds with more than 65% in debt. Gold and silver ETFs and funds left it |
| 1 April 2026 | Sales from this date fall under the new Income-tax Act, 2025 |
Units bought before 1 April 2023 and sold before 23 July 2024, after more than 36 months, were taxed at 20% with indexation.
Gold ETF, gold fund, SGB and physical gold: tax compared
This table compares tax only. It does not say which is the better investment.
| Gold investment | How it is taxed (FY 2025-26) |
|---|---|
| Gold or silver ETF | Long-term after more than 12 months, 12.5% without indexation. Otherwise your slab rate |
| Gold or silver fund of funds | Long-term after more than 24 months, 12.5% without indexation. Otherwise your slab rate |
| Physical gold (jewellery, coins, bars) | Long-term after more than 24 months, 12.5% without indexation. Otherwise your slab rate |
| Sovereign Gold Bond (SGB) | Interest is taxable. An individual pays no tax on the gain when the bond is redeemed. From 1 April 2026, this applies only if you bought the bond at its original issue and held it until maturity. A sale on a stock exchange is taxed as a capital gain |
How to calculate tax on a gold or silver ETF
- Find the date and price of each purchase, including each SIP instalment.
- Check the holding period. ETF: more than 12 months is long-term. Fund of funds: more than 24 months. Units bought from 1 April 2023 and sold before 1 April 2025 were always short-term.
- Work out the gain: sale value minus cost and the expenses of the sale. No indexation.
- Apply the rate: your slab rate for a short-term gain, 12.5% for a long-term gain.
- Add 4% cess on the tax (plus surcharge, if your income is high enough).
How to reduce tax on gold and silver ETFs
The law gives three ways to lower the tax. None of them removes it in every case.
- Hold long enough. If your slab rate is above 12.5%, a long-term gain is taxed at a lower rate than a short-term one.
- Set off capital losses. A short-term capital loss can be set off against any capital gain. A long-term loss can be set off only against long-term gains. Unused losses carry forward for up to 8 assessment years, but only if you file your return by the due date.
- Section 54F. A long-term gain on ETF units can be exempt if you invest the net sale amount in one residential house within the time limits and meet the other conditions. See our guide to section 54F.
A capital loss cannot be set off against salary or other income.
How to report gold and silver ETFs in your ITR
| Your income | Form |
|---|---|
| Gold or silver ETF or fund gains, with no business income | ITR-2 |
| These gains along with business income, F&O or intraday | ITR-3 |
- Show the gain in Schedule CG (capital gains), as short-term or long-term. It does not go in Schedule 112A, which is for equity shares and equity funds.
- ITR-1 cannot be used, because it allows no short-term gain and no long-term gain other than up to ₹1.25 lakh on equity.
- Before you file, check the Annual Information Statement (AIS) on the e-filing portal against your own records.
For the other conditions of each form, see which ITR form to file. If you already filed and left out a sale, you can correct it with a revised return, or with an updated return if that time has passed.
Which law applies
This guide uses section numbers from the Income-tax Act, 1961, which governs the financial year 2025-26 and earlier. Sales from 1 April 2026 fall in tax year 2026-27, under the Income-tax Act, 2025, which uses different section numbers.
How FilingSetu can help
We file income tax returns with capital gains from mutual funds, shares and property.
- A chartered accountant checks every return before filing.
- We help you e-verify the return.
- You get a named manager, and the consultation is free.
Frequently asked questions
Is gold ETF taxed at 28%?
No. India has no 28% rate for gold ETFs. A gain on units held more than 12 months is taxed at 12.5%, and a gain on units held 12 months or less at your slab rate. 28% is the top rate in the United States on gains from collectibles such as coins and art. It is not an Indian tax rate.
Which ETFs are tax-free?
None is fully tax-free. For equity ETFs, long-term gains up to ₹1.25 lakh a year, counted together with your other equity gains, are not taxed. Gold and silver ETFs get no such tax-free amount.
Which gold investment is tax free?
The Sovereign Gold Bond comes closest. For FY 2025-26, an individual pays no tax on the gain when the bond is redeemed. From 1 April 2026, this applies only if you bought the bond at its original issue and held it until maturity. The interest on the bond is taxable.
How are ETF funds taxed in India?
It depends on what the ETF holds. An equity ETF is taxed at 20% on short-term gains and 12.5% on long-term gains above ₹1.25 lakh a year. A gold or silver ETF is long-term after 12 months, taxed at 12.5%, and short-term gains are taxed at your slab rate.
Do you pay capital gains on silver ETFs?
Yes. A gain on silver ETF units held more than 12 months is taxed at 12.5% without indexation. A gain on units held 12 months or less is added to your income at your slab rate.
Where to show Silver ETF in ITR?
In ITR-2, or ITR-3 if you also have business income. Show the gain in Schedule CG as short-term or long-term. It does not go in Schedule 112A, and ITR-1 cannot be used.
How to avoid capital gains tax on ETF?
You can reduce it, within the law. Hold the units long enough to get the 12.5% long-term rate if your slab is higher, set off capital losses, or claim section 54F on a long-term gain if you invest the net sale amount in a house.
What is the holding period for a gold ETF to be long-term?
More than 12 months, because gold ETF units are listed. A gold fund of funds, which is not listed, needs more than 24 months.
Is there indexation on gold ETFs?
No. Indexation is not available for any sale on or after 23 July 2024.
Is the ₹1.25 lakh exemption available on gold ETFs?
No. The ₹1.25 lakh limit is only for long-term gains on equity shares and equity funds. A long-term gain on a gold ETF is taxed at 12.5% from the first rupee.
Gold ETF or gold mutual fund: which is taxed less?
The rates are the same: 12.5% on long-term gains and your slab rate on short-term gains. A gold ETF becomes long-term after 12 months, a gold fund of funds after 24 months. Which is the better investment depends on more than tax.
I bought a gold ETF in 2023. How is it taxed now?
If you bought it on or after 1 April 2023 and sell on or after 1 April 2025, normal rules apply: long-term after 12 months, taxed at 12.5%. Sales before 1 April 2025 were always short-term under section 50AA.
Can I set off a loss on a gold ETF?
Yes. A short-term loss can be set off against any capital gain, and a long-term loss only against long-term gains. Neither can be set off against salary.
Hinglish mein sawaal
Gold ETF par kitna tax lagta hai?
12 mahine se zyada rakhne par gain long-term hota hai aur us par 12.5% tax lagta hai, bina indexation. 12 mahine ya usse kam mein bechne par gain aapki income mein judta hai aur slab rate se tax lagta hai.
Silver ETF bechne par tax kab lagta hai?
Jis saal aap silver ETF units bechte hain, usi saal sirf gain par tax lagta hai. 12 mahine se zyada rakhe hon to 12.5%, warna slab rate.
Last reviewed: 2 October 2026
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This page explains the law as it stands on the review date. It is not advice on your specific case.
