Beyond the Headlines: Decoding the ₹1 Lakh Silver Crash and the "Original Subscriber" SGB Tax Trap
Yesterday’s Union Budget 2026 presentation by FM Nirmala Sitharaman has sent shockwaves through the bullion market. While many were expecting a duty cut, the reality turned out to be a massive volatility trap. If you've been watching the gold rates at allroundupdate.com, you know that the ₹1.83 lakh peak now feels like a distant memory.
From record-breaking highs of ₹1,83,000 per 10 grams just days ago, we are now witnessing a historic "Gold Rush" in reverse. But what exactly changed in the Budget? Why did silver prices tumble by nearly ₹1 lakh in a single week?
Market volatility has left investors questioning the future. For a balanced portfolio, understanding long-term trends is key. To see if gold could hit the ₹2 Lakh mark post-budget, read our
In this exclusive deep dive for AllRoundUpdate, we break down the Union Budget 2026 impact on Gold and Silver, the new tax traps you need to avoid, and whether this is the "Golden Opportunity" you’ve been waiting for.
1. The Big Announcement: Gold & Silver Import Duty 2026
There was intense speculation that the government would slash the import duty to 5%. However, the Union Budget 2026 maintained the basic customs duty (BCD) at 6% (which includes the 5% BCD and 1% AIDC).
The change in import duty is a strategic move by the government to balance the CAD (Current Account Deficit). To understand the official breakdown of these changes, you can refer to the latest
which details the revised rates for precious metals. CBIC Customs Duty Notifications
While the duty didn't drop as much as the industry hoped, the real "shocker" came from the Baggage Rules 2026.
The "Dubai Trip" Just Got Better
The government has increased the duty-free allowance for passengers bringing goods from abroad.
- New Limit :- You can now bring gold/silver jewellery worth up to ₹75,000 duty-free (up from ₹50,000).
Personal Use Import :- Customs duty on goods imported for personal use (via post or courier) has been slashed from 20% to 10%.
2. The SGB "Tax Trap": A Major Change for Investors
If you invest in Sovereign Gold Bonds (SGBs), listen closely. This is the biggest policy shift of 2026.
Previously, if you bought SGBs from the secondary market (like the stock exchange) and held them until maturity, your capital gains were tax-free. Not anymore.
This shift in taxation rules marks a significant departure from previous years. Investors can verify the issuance terms and tax-related guidelines on the official
, which remains the primary source for bond-related regulations. RBI Sovereign Gold Bond FAQ page
The New Rule: As per Budget 2026, the Capital Gains Tax exemption at maturity will ONLY be available to original subscribers (those who bought it directly from the RBI). If you buy SGBs from someone else on the market, you will now have to pay tax on the profit at maturity.
3. Why are Gold and Silver Prices Crashing?
Immediately following the Budget, gold and silver hit the lower circuit on the MCX. Here is why the "Yellow Metal" is turning red:
Current market trends showing a significant crash in MCX gold rates.
Profit Booking :- Investors who saw gold hit ₹1.8 lakh took their money and ran the moment the Budget didn't offer a massive duty cut.
The "Warsh" Factor :- The nomination of Kevin Warsh as the US Fed Chair has strengthened the US Dollar, making gold more expensive globally and dampening demand.
Margin Hikes :- The CME Group increased margins for trading, forcing "weak hands" to sell their positions.
| Metal | Pre-Budget Peak (Jan 2026) | Post-Budget Price (Feb 2, 2026) |
| Gold (24K/10g) | ₹1,83,000 | ~₹1,47,000 - ₹1,51,000 |
| Silver (1kg) | ₹4,04,500 | ~₹2,90,000 - ₹3,00,000 |
As confirmed by the latest MCX data on February 2, 2026, silver has seen its sharpest single-week decline of nearly 33% from its peak."
4. Taxation Table: Physical vs. Digital Gold (2026-27)
Navigating taxes is tricky. Here is the updated structure for the 2026-27 fiscal year:
| Asset Type | GST Rate | STCG (Short Term) | LTCG (Long Term) |
| Physical Gold | 3% (+5% on making) | As per Income Slab | 12.5% (No Indexation) |
| Gold ETFs | Nil | As per Income Slab | 12.5% (After 12 months) |
| Digital Gold | 3% | As per Income Slab | 12.5% (After 24 months) |
Calculating your capital gains correctly is vital to avoid notices. For the most accurate and updated tax slabs and holding periods for various assets, always check the
before filing your returns for FY 2026-27. Income Tax Department of India’s portal
5. Expert Opinion: Should You Buy or Wait?
The market is currently in a "Sell on Rise" mode. Experts suggest that while the long-term trend remains bullish due to geopolitical tensions, the short-term volatility is high.
While the market is in "Sell on Rise" mode, smart investors seek opportunities in other sectors. To find potential entry points while gold stabilizes, check our daily analysis on
Pro Tip: If you are buying for a wedding, the current correction of nearly 20% from the peak is a decent entry point. However, for investors, waiting for the price to stabilize around the ₹1,40,000 mark for gold might be wiser.
Frequently Asked Questions (FAQs)
Is there any change in GST on gold in Budget 2026 ?
No, the GST on gold remains unchanged at 3%. However, the customs duty on personal imports has been rationalized.
Can I still buy gold from Dubai duty-free ?
Yes, the limit has been increased to ₹75,000 for jewellery. Anything above this or in the form of coins/bars will attract standard customs duty.
Updated :- Yes, the duty-free limit has been increased to ₹75,000 for jewellery per passenger (subject to gender-based norms). Anything above this.
What happens to my old SGB investments ?
If you were the original buyer, your tax-free status at maturity remains safe. If you bought them from the secondary market, you need to factor in a 12.5% tax on your gains.
Updated :- If you were the original subscriber, your tax-free status remains safe. However, secondary market buyers now face a 12.5% tax, making it crucial to track your purchase source.
Conclusion
The Union Budget 2026 has proved that gold is no longer just a "safe haven"—it’s a high-volatility asset. While the government didn't give a direct price cut via duties, the tightening of SGB rules and the crash in global rates have created a unique window for buyers. Stay cautious, track the MCX levels, and always consult a financial advisor before making heavy investments.
Disclaimer
The information provided in this blog is for educational purposes only and does not constitute financial advice. Gold and Silver investments are subject to market risks. Please check live rates and government notifications at allroundupdate.com for the latest updates.
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