How are gold ETFs and gold fund of funds taxed in India?

Lesson 43 of 50 for advisers · Gold and silver funds · 4 min read · Reviewed 13 Nov 2026

Quick answer

Neither is a specified mutual fund, so long-term gains are taxed at 12.5% under section 197. A gold fund of funds is long-term after 24 months. A listed gold ETF reads as long-term after 12 months, as a listed security under section 2(101), though a CA should confirm. Gold and silver ETFs must hold at least 95% in the metal or related instruments.

A gold or silver ETF holds at least 95% of net assets in the metal or related instruments. Physical gold is 995 fine and silver 999 fine, to LBMA Good Delivery standards.

Gold deposit schemes, gold monetisation and gold derivatives together may not exceed 50% of a gold ETF’s NAV.

Neither gold ETFs nor gold fund of funds are specified mutual funds, so long-term gains are taxed at 12.5% under section 197 (112 of the 1961 Act).

A gold fund of funds is long-term after 24 months. A listed ETF unit reads as long-term after 12 months, as a listed security; confirm with a CA.

Key idea: Silver ETFs have been allowed since 24 Nov 2021.

Sources

Try the short quiz on this page to check what stuck.

Common questions

How is the iNAV of a gold ETF set?

From the latest available gold price.

How are short-term gains taxed?

At the investor’s slab rate under the general rules.

What can a silver ETF hold in derivatives?

Silver commodity derivatives up to 10% of NAV, unless the ETF intends to take delivery.

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