Selling gold jewellery is a huge decision. Indian families are usually protective of their gold as it is a popular investment tool and is seen as a safe bet even during economic uncertainty.
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So, when you eventually plan to sell your gold jewellery, you need to be aware about what to expect. It can be a disappointing experience if you receive less money than expected. Although gold prices may be high, several factors affect the final resale value of your jewellery.
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Here's What To Know:
1. Making Charges Are Not Refunded: When you buy gold jewellery, the shopkeeper imposes “making charges” on the item. It can range from 5% to 20%, or even higher, depending on the intricacies and detailing of the jewellery. When you sell your gold, these making charges are not refunded to you. Most jewellers will only pay the worth of gold on the date of sale.
2. Purity of Gold: The resale value depends on the purity of your gold. For example, 22-karat gold contains more pure gold than 18-karat gold. The value of your jewellery will depend on what type of gold it was made from.
3. Melting and Testing Charges: Some jewellers may deduct charges for testing or melting the gold. This can impact the overall amount you receive.
4. Different Prices Offered: Some buyers tend to offer full value of gold if it was purchased from them. Others may buy it at a reduced price with higher deductions if the gold jewellery was bought from someplace else. You need to compare rates across buyers to ensure that you get the best value.
5. GST is not refunded: In India, 3% goods and services tax is applicable when you buy physical gold. This value is generally not recovered when you resell it.
Example: Reselling a 10-Gram Gold Ring
Suppose you bought a 10-gram, 22-karat gold ring when the gold price was Rs 1,00,000 per 10 grams. The jeweller charged 5% making charges. Later, you decide to sell the ring when the gold price rises to Rs 1,25,000 per 10 grams.
Particulars | Amount |
Gold value at purchase | Rs 1,00,000 |
Making charges (5%) | Rs 5,000 |
GST (3% on Rs 1,05,000) | Rs 3,150 |
Total purchase cost | Rs 1,08,150 |
Resale value (assuming no deductions) | Rs 1,25,000 |
Actual profit | Rs 16,850 |
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