Buying outside India? Use the Global Gold Price Calculator instead — it supports troy ounce pricing, 10K/14K karats and local sales tax/VAT.
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How Gold Jewellery Price is Calculated
The final price you pay for gold jewellery in India is not just the day's gold rate — it also includes purity adjustment, wastage (melting loss), making charges and GST. The typical formula used by jewellers is:
Final Price = (Gold Value + Wastage + Making Charges) + GST
Gold Value = Rate per gram × Purity factor × Weight.
Why does purity change the price per gram?
24K gold is 99.9% pure, so its purity factor is 1.0. Lower karats mix in other metals for durability — 22K is 91.6% pure gold (factor 0.916), and 18K is 75% pure (factor 0.75). Since you're getting less actual gold per gram at lower karats, the purity factor scales the day's 24K rate down accordingly — that's why 22K jewellery costs less per gram than 24K, even on the exact same day's rate.
What makes up the final price
| Component | What it covers | Why it's separate |
|---|---|---|
| Wastage | Metal lost while shaping and polishing | A material loss, not a labour cost — billed as a % of gold value. |
| Making charges | Artisan's labour and design work | Reflects craftsmanship, billed as a % of gold value or a flat ₹/gram rate. |
| GST | Tax on the full invoice | Applied on gold value + wastage + making charges combined, not gold value alone. |
How to calculate a gold price, step by step
- Enter today's Gold Rate per gram from a reliable source such as a jeweller association rate, bank, or financial news site.
- Choose the Purity — 24K, 22K or 18K — matching the jewellery you're buying.
- Enter the jewellery's Weight in grams, and Making Charges either as a percentage of gold value or a flat rate per gram.
- Enter the Wastage percentage and GST rate quoted by your jeweller.
- Click Calculate Price to see the final price and a breakdown of gold value, wastage, making charges and GST.
Practical tips for buying gold in India
- Look for BIS hallmarking (HUID) on jewellery, which certifies purity and is now mandatory for most gold jewellery sold in India.
- Making charges are often negotiable, especially for plain/traditional designs versus intricate or branded designs.
- Always ask for a GST-inclusive quote before comparing jewellers, since a lower pre-GST price can still cost more after tax.
Frequently Asked Questions
24K gold is 99.9% pure, while 22K gold is only 91.6% pure — the rest is alloy metal (like silver or copper) mixed in for durability. Since you're getting less actual gold per gram, jewellers apply a purity factor (0.916 for 22K) to the day's 24K rate, which is why 22K gold costs less per gram than 24K, even on the same day.
BIS hallmarking (identified by a unique HUID number) is India's official gold purity certification, issued by the Bureau of Indian Standards. It confirms the jewellery's actual karat purity matches what the jeweller claims, and is now mandatory for most gold jewellery sold in India — always check for it before buying, to avoid paying 22K prices for lower-purity gold.
Often, yes — especially for plain or traditional designs, where the labour involved is simpler. Intricate, branded, or designer pieces usually have less room for negotiation, since making charges there reflect genuine design complexity and brand premium rather than just standard labour.
Wastage covers the small amount of gold physically lost while cutting, shaping and polishing the raw metal into finished jewellery — it's a material loss, not a labour cost. Making charges cover the artisan's labour and design work. Jewellers bill them separately because they represent two genuinely different costs, even though both add to your final price.
GST (currently 3% on gold in India, as a general rule) is applied on the full invoice value — gold value plus wastage plus making charges combined — not on the gold value alone. Always ask for a GST-inclusive quote before comparing prices between jewellers, since a lower pre-GST price can still end up costing more after tax.
The purity factor converts the day's quoted 24K gold rate into the actual value of your chosen karat. It's simply the fraction of pure gold in that karat — 1.0 for 24K, 0.916 for 22K, and 0.75 for 18K — multiplied by the rate and the weight to get your jewellery's base gold value.
It doesn't include exchange value adjustments if you're trading in old gold, stone/diamond charges on studded jewellery, delivery or insurance charges, or any jeweller-specific loyalty discounts. It calculates a straightforward new-jewellery price from rate, purity, weight, wastage, making charges and GST.