How to use this calculator
This calculator works for any gram-denominated gold holding: physical gold (bars, coins, jewellery), digital gold, gold ETFs, or gold mutual funds. The core formula is simple — your returns depend on the price per gram at purchase vs. at sale, and how many grams you own.
Key input: effective purchase price per gram
For jewellery, your effective cost per gram is higher than the raw gold rate because of:
- GST: 3% on gold + 5% on making charges (as per GST schedule)
- Making charges: typically 8–25% of gold value for jewellery; ~2% for gold coins
For digital gold or ETFs, making charges don’t apply, but there may be a small spread (buy/sell difference) of 0.5–1%.
Always enter your actual cost per gram (total rupees paid ÷ grams of gold received) for accurate results.
Capital gains taxation on gold (post-Budget 2024)
| Holding period | Tax rate | Classification |
|---|---|---|
| ≤ 24 months | Slab rate (5%/10%/15%/20%/30%) | Short-term capital gain (STCG) |
| > 24 months | 12.5% without indexation | Long-term capital gain (LTCG) |
| SGB at 8-yr maturity | Nil — fully exempt (§10(47) IT Act) | Exempt |
Effective from 23 July 2024 per Finance Act 2024. For assets purchased before 23 July 2024, the beneficial grandfather rate of 20% with indexation may apply in limited cases — consult a tax professional.
Gold price benchmarks (India, INR)
Gold prices in India are denominated in rupees and tracked via:
- IBJA (India Bullion & Jewellers Association): Official INR gold rates used by RBI for SGB pricing; 995 purity and 999 purity variants published daily.
- MCX (Multi Commodity Exchange): Gold futures prices; most active contract is Gold 10g (MCX standard).
- Retail price: Hallmarked jewellery price from jewellers — includes making charges and 3% GST. Varies city to city.
For planning, use the IBJA 24K (999 purity) price as your reference — it’s the closest to international spot.
Formula
Grams bought = amount invested ÷ purchase price per gram
Sell value = grams bought × sell price per gram
Absolute return = sell value − amount invested
Absolute return % = (absolute return ÷ amount invested) × 100
CAGR = (sell value ÷ amount invested)^(1 ÷ tenure years) − 1
Physical gold vs. SGB comparison
If you’re considering gold for 8+ years, comparing physical gold with SGBs is important:
| Physical gold | Sovereign Gold Bond (SGB) | |
|---|---|---|
| Interest / yield | Nil | 2.5% p.a. on issue price |
| GST on purchase | 3% | Nil |
| Making charges | 8–25% | N/A |
| Capital gain at 8yr | LTCG @ 12.5% | Nil (§10(47) exempt) |
| Purity risk | Hallmarking risk | Government guarantee |
| Liquidity | High (sell to jeweller/exchange) | Limited (secondary market or premature redemption from yr 5) |
Numerical example at ₹6,000/gram, 8-year hold to ₹10,000/gram, 100g:
| Physical gold | SGB | |
|---|---|---|
| Invested | ₹6,00,000 | ₹6,00,000 |
| Interest received | — | ₹1,20,000 (2.5% × 8 yr) |
| Sell value | ₹10,00,000 | ₹10,00,000 |
| LTCG tax | ₹50,000 (12.5% × ₹4,00,000) | Nil |
| Net proceeds | ₹9,50,000 | ₹11,20,000 |
| Net gain | ₹3,50,000 | ₹5,20,000 |
The SGB advantage: ₹1,70,000 more in net returns over 8 years (₹1,20,000 tax-free interest + ₹50,000 LTCG tax saved).
Bridges
- SGB Calculator — if you hold SGBs, use this to calculate returns including the 2.5% interest component and check tax-free status
- LTCG Property Calculator — gold LTCG calculation method (12.5% without indexation post-Budget 2024) is similar to property; understand the tax impact
- CAGR Calculator — calculate CAGR for any start and end value, not just gold
- Lumpsum Calculator — compare gold CAGR with equity mutual fund projected returns