Silver has been a trusted store of value in Indian households for centuries. Whether it is a family wedding, a festival celebration, or a long-term investment decision, physical silver continues to hold a special place in the Indian economy. But buying silver is not as straightforward as walking into a shop and picking up the shiniest item on display. Purity standards, making charges, tax implications, and storage concerns all play a role in determining whether you get genuine value for your money. This guide walks you through every aspect of buying physical silver in India so you can make informed decisions.
Types of Physical Silver You Can Buy
The Indian market offers several forms of physical silver, each suited to different purposes and budgets.
Silver Coins: Silver coins are the most popular entry point for small investors. They are available in weights ranging from 1 gram to 100 grams and are sold by banks, jewellers, and online platforms. Coins from government mints or reputed brands like MMTC-PAMP carry higher trust due to certified purity. They are easy to store, simple to resell, and make excellent gifts during Dhanteras and Akshaya Tritiya.
Silver Bars and Biscuits: For those looking to invest larger sums, silver bars are available in weights of 100 grams, 500 grams, and 1 kilogram. Bars typically carry lower making charges compared to coins, making them more cost-efficient for bulk purchases. Always insist on bars that come with a purity certificate and serial number.
Silver Jewellery: Jewellery is the most traditional form of silver ownership in India. From anklets and bangles to elaborate necklace sets, silver jewellery serves both as adornment and investment. However, jewellery comes with significant making charges that can range from 8% to 25% of the silver value, which reduces its pure investment appeal.
Silver Utensils and Artefacts: Silver plates, glasses, bowls, and pooja items are commonly purchased during festivals and weddings. While they hold sentimental and cultural value, their resale value is often lower due to high craftsmanship costs and difficulty in assessing exact silver content.
Where to Buy Silver in India
Choosing the right seller is just as important as choosing the right product. Here are your primary options.
Local Jewellers: Established jewellers such as Tanishq, Kalyan Jewellers, Malabar Gold & Diamonds, and regional family-run stores are the most common source of physical silver. The advantage is that you can physically inspect the product before purchasing. Always ask for a proper tax invoice and purity certificate.
Banks: Several Indian banks, including SBI, HDFC Bank, and ICICI Bank, sell silver coins, usually in partnership with refineries like MMTC-PAMP. Bank-sold coins are generally of guaranteed 999 purity and come in tamper-proof packaging. However, banks typically do not buy back silver, so resale must happen through jewellers or other buyers.
Online Platforms: E-commerce platforms and dedicated bullion websites have made silver purchasing convenient. Platforms allow you to buy certified silver coins and bars with doorstep delivery. When buying online, verify the seller's credentials, return policy, and whether the product comes with a purity certificate.
Government Mints: India Government Mint (IGM) and MMTC produce silver coins and bars that carry sovereign assurance of purity. These products are available through select banks and authorised dealers.
Checking Purity and BIS Hallmarking
Purity is the single most critical factor when buying physical silver. In India, silver purity is measured in parts per thousand. The most common grades are 999 (99.9% pure, used in coins and bars) and 925 (92.5% pure, known as sterling silver, commonly used in jewellery).
The Bureau of Indian Standards (BIS) operates a hallmarking scheme for silver. A BIS hallmark on a silver article confirms that it has been tested at an authorised assaying centre and meets the declared purity. The hallmark typically includes the BIS logo, the purity grade, the assaying centre's identification mark, and the jeweller's identification mark.
While BIS hallmarking for silver is not yet mandatory in the way gold hallmarking is, it is strongly recommended that you buy only hallmarked silver. Non-hallmarked silver from unverified sources may contain impurities or be of lower purity than claimed. Use our free silver price calculator to verify whether the price you are being quoted aligns with the current market rate for the stated purity.
Understanding GST and Making Charges
When you buy physical silver in India, the Goods and Services Tax (GST) applies at 3% on the value of the silver. In addition, making charges attract a GST of 5%. This means the total tax outgo on a piece of silver jewellery is a combination of both these components.
For example, if you buy a silver bangle worth Rs 5,000 in silver content with Rs 1,000 in making charges, the GST calculation would be: 3% of Rs 5,000 (Rs 150) plus 5% of Rs 1,000 (Rs 50), totalling Rs 200 in tax. Understanding this breakdown helps you negotiate better and compare prices across sellers.
Making charges vary significantly depending on the complexity of the design, the reputation of the jeweller, and whether the item is machine-made or handcrafted. Coins and plain bars carry the lowest making charges, typically between 2% and 5%, while intricate jewellery can go as high as 25%. If your primary goal is investment, stick to coins and bars to minimise the premium over spot price.
Storage and Safety Tips
Unlike gold, silver is bulkier for the same value, which makes storage a practical consideration. Here are some guidelines to keep your silver safe and in good condition.
Bank Lockers: A bank locker is the most secure storage option for significant silver holdings. Annual rental costs vary by city and locker size, but the peace of mind is worth the expense. Keep a detailed inventory with photographs and purchase receipts outside the locker for insurance purposes.
Home Safes: If you prefer to keep silver at home, invest in a quality fire-resistant safe that is bolted to the floor or wall. Ensure your home insurance policy covers the value of your silver holdings.
Preventing Tarnish: Silver tarnishes when exposed to air and moisture. Store silver items in anti-tarnish pouches or wrap them in acid-free tissue paper. Silica gel packets inside your storage container help absorb moisture. Avoid storing silver in plastic bags for long periods, as certain plastics can accelerate tarnishing.
Documentation: Always retain purchase invoices, purity certificates, and any other documentation. These records are essential for resale, insurance claims, and calculating capital gains tax when you eventually sell.
Conclusion
Buying physical silver in India is a rewarding endeavour when done with the right knowledge. Prioritise purity by insisting on BIS-hallmarked products, buy from reputable sources, understand the tax and making charge structure, and store your silver securely. Whether you are buying a small coin to mark a festive occasion or building a substantial silver portfolio, these fundamentals will help you get the best value. Before making any purchase, check the latest silver rates on our homepage to ensure you are paying a fair price in line with current market conditions.