Union Budget 2026 is a key moment for everyone because it influences how income, savings and assets are treated. For Indian households, gold and silver remain closely tied to these decisions. They are bought for life events, family security and long-term comfort, besides returns.

In Union Budget 2026, the most relevant signals for precious-metal buyers come from two directions. One is the way gold-linked products are now treated with greater clarity. The other is how jewellery purchases from abroad are affected through customs and baggage rules. Alongside this, the budget’s strong focus on manufacturing and clean energy matters, because these are areas where silver continues to play an important supporting role.

What stays the same for buyers

GST continues at the time of purchase

Buying physical gold continues to attract Goods and Services Tax. This cost is paid upfront and becomes part of the purchase price.

Gold attracts 3 percent GST on value.

Jewellery making charges, when billed separately, attract 5 percent GST.

This amount cannot be adjusted against capital gains later. As a result, the effective cost of ownership begins higher than the quoted metal price.

Capital gains still depend on how long you hold

The basic structure of capital gains taxation remains unchanged.

Short-term holdings are taxed at the applicable income tax slab.

Longer holding periods qualify for a lower, fixed capital gains rate.

What matters most is the holding period and the route chosen. This applies to both physical holdings and financial products linked to gold.

Interest on Sovereign Gold Bonds remains taxable

Sovereign Gold Bonds continue to pay annual interest of about 2.5 percent. This interest remains taxable as regular income. Union Budget 2026 does not alter this treatment.

What is new in Union Budget 2026?

A clear change for Sovereign Gold Bonds bought from the market

The most important update in the budget relates to Sovereign Gold Bonds purchased from the secondary market.

Earlier, many investors assumed that capital gains on Sovereign Gold Bonds would be tax-free at maturity, regardless of where the bonds were bought. Union Budget 2026 removes this assumption.

Capital gains exemption at maturity now applies only to bonds subscribed at original issuance and held until redemption.

Bonds bought from the secondary market do not qualify for this exemption.

Gains on such bonds are taxed when sold or redeemed, based on holding period.

Investors who bought SGBs at original issuance and hold them till maturity continue to get the tax benefit. Those who bought from the secondary market need to factor in tax before expecting similar returns.

How gold is taxed across different formats?

Gold is not taxed the same way across all forms. The structure chosen directly affects holding period thresholds and tax rates.

Physical and digital gold

Physical gold and digital gold that mirror physical ownership follow the same timeline:

Held up to 24 months: gains are taxed at income tax slab rates.

Held for more than 24 months: gains are taxed at a flat rate without indexation.

Indexation is no longer available, which makes timing more important.

Gold ETFs

Gold exchange-traded funds are treated like listed securities.

Held for more than 12 months: gains are taxed at a flat rate without indexation.

Shorter holdings are taxed at slab rates.

These products offer liquidity, but require discipline around holding period.

Gold mutual funds investing in ETFs

Gold mutual funds that invest in ETFs follow a longer holding requirement.

Held for more than 24 months: gains are taxed at a flat rate without indexation.

Shorter holdings are taxed at slab rates.

The budget reinforces the need to distinguish between physical gold and fund-based exposure.

What happens when you sell

Tax outcomes at exit depend on both the format and how long the asset has been held.

Selling physical gold after more than two years qualifies for long-term capital gains at a fixed rate. Selling earlier means the same gain is added to income and taxed at slab rates. This difference can materially affect net returns.

Because GST paid at purchase does not reduce capital gains tax, buyers should always look at post-tax outcomes, not just headline prices.

Jewellery bought abroad and baggage rules

Union Budget 2026 also affects jewellery purchases made overseas.

The duty-free baggage allowance for international travellers has been raised to ₹75,000.

The tariff rate on dutiable personal imports has been reduced from 20 percent to 10 percent.

Jewellery brought into India within the revised allowance does not attract customs duty. Coins and bars remain outside this benefit and are subject to standard rules if limits are crossed.

These changes make overseas jewellery purchases slightly more favourable, but travellers should still keep invoices and declare items when required.

Where silver fits naturally in the budget

Several priorities highlighted in Union Budget 2026 also shape how silver continues to matter for buyers and investors.

Jewellery buying decisions

Households often purchase silver jewellery alongside gold for weddings, festivals and gifting. Changes around baggage rules and jewellery concessions therefore influence silver purchases in the same practical way, especially for families bringing jewellery from abroad.

Manufacturing and clean energy focus

The budget places strong emphasis on electronics manufacturing, components, semiconductors and clean energy. These sectors depend on silver for uses such as electrical conductivity and solar applications. As spending and incentives flow into these areas, silver remains relevant beyond household buying and into industrial demand.

Bottom line

Union Budget 2026 does not change why Indians buy gold and silver. It sharpens the rules around how certain routes are treated and brings more clarity to jewellery imports and government-backed gold products. At the same time, its focus on manufacturing and energy transition reinforces why silver continues to matter in the real economy, not just in household lockers. This clarity, more than price movement, is what buyers and investors should take forward from the budget.

FAQs

What is the main focus of Union Budget 2026?

Union Budget 2026 focuses on fiscal stability, long-term growth and strengthening domestic manufacturing. It places emphasis on capital expenditure, clean energy, electronics manufacturing and simplifying tax structures where possible.

Did Union Budget 2026 change income tax slabs?

Union Budget 2026 did not introduce major changes to income tax slabs. The broader approach remains focused on stability rather than frequent slab revisions.

Does Union Budget 2026 impact household savings?

Yes. While not all changes are direct, the budget influences how different savings and assets are treated, including investments, capital gains and the cost of buying certain assets like gold.

Did Union Budget 2026 make changes to capital gains taxation?

Union Budget 2026 clarified capital gains treatment in specific areas, particularly for certain investment instruments. The holding period continues to play a key role in determining tax outcomes.

What changed for Sovereign Gold Bonds in Union Budget 2026?

Union Budget 2026 clarified that the capital gains tax exemption at maturity applies only to investors who subscribed to Sovereign Gold Bonds at original issuance and hold them until redemption. Bonds bought from the secondary market do not qualify for this exemption.

Did Union Budget 2026 change the rules for bringing gold or silver jewellery from abroad?

Yes. The duty-free baggage allowance for international travellers has been increased to ₹75,000. Jewellery brought within this limit does not attract customs duty, subject to applicable conditions. Coins and bars remain outside this allowance.

Why is silver still relevant even without a specific budget announcement?

Silver remains relevant because Union Budget 2026 places strong emphasis on sectors such as electronics manufacturing and clean energy, where silver is widely used. These policy priorities can support long-term demand beyond household jewellery purchases.