Buying or selling gold in India means decoding more than the daily market rate. Purity (karat), weight, making charges, hallmarking, and GST all change the final price. This guide explains how jewellers and calculators arrive at a rupee figure—and how you can verify it before you pay.
Quick reference table
| Component | What it means | Typical range |
|---|---|---|
| Gold rate | Per-gram price for 24K (999) purity | Set daily from MCX / IBJA benchmarks |
| Purity factor | 22K = 91.6% gold, 18K = 75% | Multiply 24K rate by purity % |
| Net weight | Gold weight in grams (excluding stones) | From scale or invoice |
| Making charges | Craftsmanship fee per gram or flat | ₹200–₹1,200+ per gram (varies by design) |
| GST | Tax on making charges + value-added portions | 3% on gold value; 5% on making (as of 2026 norms) |
| Hallmark (BIS) | Purity certification | Look for HUID on invoice |
The basic formula
The simplest mental model most jewellers use:
Gold value = (Daily 24K rate × Purity factor × Net weight in grams) + Making charges + GST
For 22K jewellery, the purity factor is 22 ÷ 24 = 0.9167. If today’s 24K rate is ₹7,200 per gram and your bangle weighs 10 g (net gold, no stones):
| Step | Calculation | Amount (₹) |
|---|---|---|
| Base gold value | 7,200 × 0.9167 × 10 | 66,002 |
| Making charges | ₹600/g × 10 g | 6,000 |
| GST on gold (3%) | 3% × 66,002 | 1,980 |
| GST on making (5%) | 5% × 6,000 | 300 |
| Total | 74,282 |
Numbers are illustrative—always use the rate and tax rules quoted on your invoice date.
Understanding karat and purity
Indian jewellery is commonly sold as 22K (91.6% gold) for ornaments and 24K (99.9%) for coins or bars. 18K (75%) appears in diamond settings where harder alloy is needed.
| Karat | Purity % | Common use |
|---|---|---|
| 24K | 99.9% | Coins, bars, some plain bands |
| 22K | 91.6% | Most traditional jewellery |
| 18K | 75.0% | Diamond / studded jewellery |
| 14K | 58.5% | Lightweight fashion pieces |
BIS hallmarking assigns a unique HUID (Hallmark Unique ID). Scan or verify it on the BIS CARE app before large purchases.
Making charges explained
Making charges compensate the jeweller for design, wastage, and labour. They may be quoted per gram or as a percentage of gold value. Intricate temple jewellery commands higher charges than plain machine-made chains.
- Per-gram rate: Easy to compare—multiply by net weight.
- Percentage: 8–25% of gold value is common for handmade pieces.
- Flat fee: Sometimes used for simple rings or repairs.
When reselling, buyers typically pay only for gold weight at the day’s rate—making charges are not recovered. Factor that into long-term value if you plan to trade jewellery frequently.
GST and taxes
India applies GST separately on the gold component and making charges. Rules evolve—confirm current slabs with your jeweller or a chartered accountant. On most retail purchases:
- 3% GST on the gold value portion
- 5% GST on making charges
Stones (diamonds, rubies) are taxed differently and should be itemised separately on the bill. Do not let the jeweller fold stone weight into gold weight.
Step-by-step checklist
- Check today’s 24K rate from a trusted source (IBJA, MCX closing, or your bank’s bullion desk).
- Weigh the piece on a calibrated scale; subtract stone weight if applicable.
- Confirm karat from hallmark or XRF test report.
- Apply purity factor: multiply 24K rate by (karat ÷ 24).
- Add making charges as quoted per gram or percentage.
- Add applicable GST lines separately.
- Compare your total with the jeweller’s invoice—differences over 1–2% deserve a question.
Selling old gold
When you sell, jewellers usually deduct a melting or testing fee and pay based on net weight after purity test. You will not get making charges back. Compare buy-back rates at 2–3 shops; rates can differ by ₹50–150 per gram on the same day.
Free calculator tools
Use AboveTool’s math and finance calculators to double-check arithmetic:
- Percentage Calculator — verify GST and making-charge percentages.
- Unit Converter — convert grams, tola, or ounces.
Keep a screenshot of the day’s rate and your worksheet with the invoice for high-value purchases.
Frequently asked questions
What is the difference between 22K and 24K gold price?
24K is pure gold; 22K is 91.6% gold. Jewellery price = 24K rate × 0.9167 × weight (plus charges). 22K pieces cost less per gram of pure gold content than 24K at the same weight.
How do I find today’s gold rate in India?
Check IBJA (India Bullion and Jewellers Association) published rates, MCX gold futures closing price, or major jeweller websites. Rates update daily and vary slightly by city.
Are making charges negotiable?
Often yes, especially on plain designs or during festivals. Machine-made chains have thinner margins than handmade kundan. Polite comparison shopping helps.
Should I buy hallmarked gold only?
Yes. BIS hallmark with HUID is the standard consumer protection in India. Avoid unmarked gold unless you trust the seller and accept purity risk.
How is stone weight handled in pricing?
Stones should be listed separately with their own price. Gold weight for rate calculation must exclude stones. Insist on a break-up invoice.
Is gold a good investment?
Gold hedges inflation but carries making-charge loss on jewellery. Coins and bars have lower spreads. This article explains pricing—not investment advice.
Summary
Gold value in India = purity-adjusted metal rate × weight + making charges + GST. Verify karat, net weight, and each line on the bill. Use the tables above as a worksheet, cross-check the daily 24K rate, and keep hallmark documentation for resale or insurance.