The 33-year-old, who suffers from cerebral palsy and profound deafness, finished behind Britain's Sophie Christiansen (84.750) with a score of 79.000 while Helen Kearney from Ireland came in third (78.450).
This is the Tan's fourth Paralympic medal after winning a bronze in the Individual championship dressage test (Grade 1a) on Monday, adding to her two bronzes won in 2008 at Beijing.
For her achievements at this year's Games in London, the Singapore-born Tan will be awarded S$150,000 (S$50,000 for bronze and S$100,000 for silver) while a gold medal would have bagged her S$200,000.
The awards are primarily sponsored by The Tote Board and Singapore Pools.
In contrast, an Olympic athlete will be rewarded S$1 million for a gold medal while a silver and bronze will carry awards of S$500,000 and S$250,000 respectively.
There have been an overwhelming outpour of congratulations for Tan, with many calling for greater monetary award for local Paralympians.
Yahoo! Singapore reader Doreen Choo said, "Well done! She deserves to be rewarded more for her achievement."
Another reader Salleh Mohamed added, "Paralympians deserves everything if not more than the Olympians received cause whatever they do they do it harder, tougher and they're more determined."