Before buying gold for Dhanteras or Diwali, decide what you want: something to wear, a physical gift, or an investment linked to gold. Compare the complete purchase cost and the practical exit route. A lower making charge alone is not enough information.
This guide compares the formats without forecasting gold prices or recommending a seller, app or fund. Keep your festival spending limit separate from money needed for regular bills.
Coins and bars: compare the seller as well as the gold
For a bank purchase, first confirm branch availability, the named refiner or mint, weight, fineness, invoice and resale arrangements. Ask who would buy the item when you need money. Do not assume the selling bank offers buyback.
At a jeweller, request both a cash-buyback policy and an exchange policy. Ask whether they accept another seller's coins, whether original packaging is necessary, and whether testing or melting deductions apply. Get answers for the exact item you intend to buy.
BIS says the mandatory hallmarking order for jewellery and artefacts does not apply to bullion and coins. However, bullion and coins of 999/995 fineness may be hallmarked only by BIS-approved refineries or mints. Check the refiner's credentials instead of expecting the jewellery HUID process to apply unchanged.
Fineness means precious-metal content in parts per thousand: 999 means 99.9% gold and 995 means 99.5%. Compare equal weights at equal fineness. Ask for any minting, packaging or dealer premium separately; do not assume a coin has no additional charge.
Jewellery: budget for the finished article
If wearing or gifting jewellery is your purpose, include the design and workmanship in your spending decision. Ask whether making charges are a fixed amount, a charge per gram or a percentage, and request the actual rupee amount. Have any wastage or stone charges explained separately.
For HUID-hallmarked gold jewellery, the marks are the BIS logo, purity in carat and fineness, and a six-character alphanumeric HUID, as explained in this government buying advisory. BIS CARE's Verify HUID feature lets buyers check the hallmark details. Use it before payment and compare the result with the item.
Ask for net gold weight separately from stones and other components. Do not compare a jewellery item's gross weight with a bullion coin's gold weight. Our gold jewellery hallmark and HUID guide explains the counter checks in more detail.
GST: distinguish a retail sale from job work
CBIC's rate table lists gold under heading 7108, jewellery under 7113 and coins under 7118 at 3% GST in total: 1.5% CGST plus 1.5% SGST for an intra-state supply, or 3% IGST for an inter-state supply.
For a finished jewellery sale to a consumer, CBIC's Gems and Jewellery FAQ, question 7, says 3% applies to the total transaction value, including making charges, even when those charges appear separately. It is not the blanket formula “3% on gold plus 5% on making”.
Question 8 of the same FAQ separately states 5% on job charges where a registered job worker processes gold supplied by a jewellery manufacturer. That is a different transaction. If you supply your own gold for remaking, ask the supplier to identify the applicable service and tax basis rather than automatically applying the retail-sale example.
Buyback: ask what reaches your bank account
Use “buyback spread” here to mean the gap between the seller's selling quote and buying quote for comparable gold at the same time. Ask for both. Then ask for the net cash amount after every deduction, not just a percentage of an unspecified “gold rate”.
For comparison, write down the purchase total, accepted resale weight, purity assessment, reference rate and deductions. Ask whether making charges, taxes, stones or packaging premiums receive any credit. Treat an exchange allowance and a cash payout as separate offers.
Our suggested check is simple: ask what you would receive if you sold the same item back immediately. The difference from your purchase bill shows the initial round-trip cost on those quotes. It is your own comparison, not a forecast of a future resale price.
Digital gold: an app balance needs a separate risk check
SEBI's 8 November 2025 warning says the digital-gold and e-gold products it describes are neither notified securities nor regulated commodity derivatives. They operate outside SEBI's purview; securities-market investor protections do not cover them. SEBI identifies counterparty and operational risks. Consequently, an app offering other regulated services does not establish protection for its digital-gold product.
Before paying, identify the actual gold seller, custodian and contractual owner. Ask what evidence backs your balance, who audits it, and what happens if the platform or provider stops operating. Read the storage period, fees, minimum delivery quantity, delivery charges and sale-settlement terms.
Compare the displayed buy and sell quotes and the final tax-inclusive bill. Treat “insured”, “vaulted” or “24K” as claims to investigate, not substitutes for understanding regulation and your contract.
Gold ETFs and mutual funds: understand what you hold
SEBI's warning distinguishes regulated Gold ETFs offered by mutual funds from those digital-gold products. Its ETF explainer describes exchange trading and potential brokerage and demat charges. You hold fund units rather than a coin delivered to your home. Check the expense ratio, trading spread, portfolio and how closely returns follow the stated gold benchmark.
A domestic gold ETF fund of funds invests in an underlying gold ETF. This structure can allow investment without a demat account, while exposing the investor to expenses at both fund levels, as illustrated in this scheme document hosted by AMFI. Read the actual structure, total costs and exit load; do not treat every fund with “gold” in its name as identical.
Check current subscription notices too. HDFC's 15 October 2026 addendum restricted fresh subscriptions and new systematic registrations in two specified gold-related funds, while allowing existing systematic transactions and redemptions. This illustrates an availability check, not a recommendation. Read the latest notice for whichever scheme you are considering.
Sovereign Gold Bonds: check availability and the exit date
Our check on 21 October 2026 found no fresh SGB subscription window announced by RBI or the government. The latest new-issue announcement we verified was 2023-24 Series IV, subscribed during 12–16 February 2024. The government subsequently confirmed no SGB borrowing in FY 2024-25. This is a dated availability finding, not a claim that issuance can never resume. Do not plan around an assumed new tranche.
Existing SGBs are government securities issued by RBI on behalf of the government and redeemed in rupees. Demat bonds can trade on exchanges. Before buying an existing series, check its remaining life, executable market quote and original issue terms. The familiar 2.50% annual coupon is based on the original investment amount, not a later buyer's exchange purchase price. RBI's scheme FAQ also warns of capital loss if gold's market price falls.
RBI's consolidated guidelines provide an eight-year term and premature redemption after five years from issue, on an interest-payment date. Requests must reach the receiving office or relevant depository route at least 10 days before the next interest date. Follow the specific submission window in RBI's October 2026–March 2027 calendar and your intermediary's processing instructions.
Exchange sale and RBI redemption are different exit routes. Check applicable tax treatment before selling or redeeming; do not rely on an old claim that every SGB exit is tax-free.
Storage and records
For physical purchases, decide where the gold will be kept and include any locker, safe or insurance cost in your budget. Keep invoices, photographs, purity details and buyback terms separately from the article. For financial holdings, retain statements and check registered bank and nominee details.
For a gift, include the invoice and any certificate or packaging needed for future enquiries. Let the recipient know where the purchase records are kept.
Quick checklist
- I have chosen between wearing, gifting, holding physical gold and financial exposure.
- I have compared the same weight and purity, using the complete bill.
- I have checked the relevant hallmark or the financial product's identity.
- I have written buyback or redemption terms, including deductions and deadlines.
- I understand who holds the gold or records my units.
- I have checked current subscription restrictions and planned storage and record-keeping.
For a broader spending plan, see our festive-sale checklist.
Sources
All sources below checked on 21 October 2026. Fund documents illustrate structure and availability; their inclusion is not a product recommendation.
- BIS: bullion and coin hallmarking FAQ; fineness definition.
- PIB: jewellery marks and invoices; BIS: HUID verification.
- CBIC: GST rate table; Gems and Jewellery FAQs 7–8.
- SEBI: digital-gold caution; ETF explainer.
- HDFC Mutual Fund: gold fund-of-funds scheme document; 15 October 2026 subscription notice.
- Ministry of Finance: February 2024 SGB issue; April 2025 parliamentary answer.
- RBI: SGB features; consolidated servicing guidelines; October 2026–March 2027 redemption calendar.
