Akshaya Tritiya 2021: Key Things You Must Check Before Buying Gold Jewellery

Akshaya Tritiya has been considered as an auspicious day to buy gold and other assets. Traditionally, investors in India have typically purchased gold in physical form during this period. “Since gold has historically provided a good hedge against inflation, it has been a popular investment option amongst Indians,” said Gautam Kalia, head – investment solutions, Sharekhan by BNP Paribas. “For providing excellent portfolio level diversification, our clients like to take 5-10% allocation to the asset class,” he added.

Gold is often considered as a safe-haven asset. If you are buying physical gold this Akshaya Tritiya, Archit Gupta, founder and chief executive officer, ClearTax advises the key things you need to check

Price of gold

You need to check the current price of gold before making a purchase. Gold prices fluctuate every day. Jewellers disclose the price of gold on a daily basis to their customers.

Purity

The purity of gold is measured in karats. The 24 karat gold is 99.9% pure. However, it cannot be crafted into gold jewellery. Most jewellery is cast in 22 karat and 18 karat gold. Check the purity of gold before making the purchase.

Hallmarked gold

Check for genuine certification before buying physical gold. The Government has set up the Bureau of Indian Standards (BIS) to ensure customers are not cheated when buying physical gold. BIS certifies the purity of gold by embossing the BIS logo commonly called the BIS Hallmark certification.

Check these BIS Hallmarking components before buying physical gold

-BIS logo: A logo of the assaying and hallmarking center

-Purity in karats / fineness

-Jewellers identification number and mark

Making charges

Gold jewellers may have making charges which are either at a flat rate per gram of gold or a percentage of the cost of gold jewellery. It is the cost of producing and designing the gold jewellery and could be around 8% of the price of gold. If you opt for intricate designs for your gold jewellery, you incur higher making charges.

Wastage charges

Some gold may be wasted when jewellers design gold ornaments. The jewellers charge fees for the gold wasted during cutting and shaping called wastage charges. Jewellers have a margin for gold wastage which is included in the final gold price and could be around 5%-7%.

Goods and Services Tax

A Goods and Services Tax of 3% is levied on the total value of the gold ornament purchased including the making charges.

Buy Back Terms

You may check the buy back terms of gold jewellery with your jeweller. Buy back is the price you get if you sell the gold jewellery back to the jeweller. Check if there are any deductions when the jewellers buy back the gold ornaments.

Ask for Bills

Ask for the bill when you purchase gold jewellery from the jeweller. It gives you a clear idea on the price breakdown such as the making and wastage charges, GST and so on.

The final amount you pay for gold jewellery depends on the price of gold for that day and the weight in grams, making and wastage charges. Gold jewelleries also attract GST at 3% on the gold price.