3 Tips to Buy Gold This Diwali 2024

With the vibrant festivities of Diwali approaching, the allure of gleaming gold attracting many eager buyers , blends a cultural tradition with investments. So before you make up your mind to make a trip to the jewellery shop of your choice for Diwali shopping for gold, it's crucial to ensure that your gold purchase is not solely a beautiful addition to your collection but a smart investment. You need to be mindful of less making charges on gold jewellery as it can significantly impact your overall cost. In this blog shall try to give you essential 3 tips to buy gold this Diwali 2024 helping you with budget-friendly insights as you make the most of this cherished custom.

 It's important to take note of a few things before we go for gold buying this Diwali 2024: 

1. Check the intrinsic value of physical Gold

If you want to know how to buy gold jewellery this Diwali, ensure that it is hallmark certified. Whatever jewellery you buy should bear the BIS ( Bureau of Indian Standards) mark on it whether it is a necklace, a bangle or a ring. Hallmark is an important feature of gold jewellery which shows you the originality and purity of the gold making process. The Hallmark certification is a proof that it has been tested for quality across various carats including 24, 23, 22, 20 , 18 and 14. It also signifies the percentage of gold in the ornament . So check the jewellery mark that signifies the origin of gold even if you get diwali gold offers and are too excited and forget to verify.

Recently the government has made hallmarking of gold mandatory and has also revised the symbols of hallmark. You need to check those new hallmarking symbols to save gold from fraudulent practices and trustworthiness when making a purchase.

2. Making charges on gold

In the 3 tips to buy gold this Diwali 2024, calculating the making charges on gold jewellery is a crucial point as saving money is a priority when buying from shops promoting gold offer on Diwali. Gold making charges can significantly be expressed as a flat rate or as a percentage of the jewellery value. Say for example, the cost of an 8g gold jewellery piece is ₹ 40,000. Now, at a flat rate of ₹ 300/g, the gold making charges will be ₹ 2,400. But at 12% of the cost, it goes up to ₹4,800, which is widely higher. 

There are a few things to keep in mind when negotiating on making charges for gold jewellery. On the basis of the cost of gold, you pay as per the cost on making charges. Say for machine made jewellery or jewellery with minimum artwork it will be less making charges on gold jewellery. Currently making charges might vary from 6% to 20% in India. When you buy in Diwali gold offer promotions, do not hesitate to compare and negotiate making charges with the jeweller. Often many jewellers make these offers and give concessions to close a sale.

3. Gold and income tax exemptions: Ideal purchase

If you are wondering how to buy gold jewellery without income tax liabilities, this tip will guide you on saving your money on gold offers this Diwali. By efficiently managing your wealth, and proper utilisation of tax exemptions, you can plan your diwali gold purchases aligning with your financials goals

Read more: Income Tax on Gold

For all your gold purchases and re-selling, remember to keep records for accurate tax filings to reduce tax burden later. For any profit earned on selling gold which you have been holding on for more than 36 months, it is called long-term gain ( LTCG) . Profit after sale prior to that period is called short term capital gain (STCG). As per the Income Tax Act, you need to pay a tax of 20% and a cess of 4% on long term gains from selling gold. So the effective tax rate on gold is 20.8% when you sell after holding it for 3 years. For STCG, the tax you pay depends on your income level. 

Celebrate Diwali with bright lights and auspicious cutom of buying gold which is just not a tradition but an investment where your diwali gold offer will shine bright as you follow the tips above. Amid the excitement, try to be mindful of hallmarking, pricing and gold making charges and the investment options to enjoy the festivities without worry and usher in peace and prosperity in your mind for years to come.

FAQs

Q1. Why do people buy gold on Diwali?

Ans. Diwali includes a five-day festival which begins with Dhanteras, and as the word may refer, gold plays a key role in the story. In mythology, there is a story of King Hima whose son was saved from death by snake bite as he got distracted by a pile of gold . People buy gold on Dhanteras to ensure good luck and it stems from this story .

Q2. What will happen to gold in 2024?

Ans. The gold prices have gone up to record highs in 2024 , reaching $2,409 per ounce. The reason for this surge may be partly due to central bank demand—together with demand from emerging markets such as China, India, and Turkey.

Q3. Does Diwali affect gold prices?

Ans. It has been witnessed from the past that the demand for gold peaks during Diwali due to its cultural significance in India, where buying gold is thought to be auspicious. Post-Diwali, this demand decreases,hence, the price of gold may stabilise or witness a slight dip.