Dhanteras 2025 gold buying guide: Price, purity, credit card offers, resale value, taxation explained

"Households also tend to buy during the festive period due to religious sentiments. However, higher prices of gold this year are likely to deter some households from making gold purchases either for consumption or as a safe-haven investment choice," a Bank of Baroda report says.

If you are planning to buy physical gold this Dhanteras, you may have many questions, such as whether to buy now or postpone, how to buy, and what to check before purchasing. This Dhanteras gold buying guide answers many of those questions. Read on.

How to buy and what to check

Before buying physical gold, there are two things you must check: price and purity.

First, amid an unabated surge in gold prices and the Dhanteras buying rush, some jewellers may be charging a premium over the actual price. You can navigate this by comparing prices at various stores. There are also some good online platforms selling pure gold coins. You may check their prices and discount offers, if any.

Second, the price of a gold item differs based on purity. The amount you need to pay for a 24kt gold piece is different from an 18kt or 22kt gold item. You should ensure that you are paying for what you want to buy.

Apart from the above, there are various other details that you should check. Some of them are as follows:

• Making charges
• Detailed bill
• Buy-back policy
• GST
• Wastage charges

Why are gold prices rising?

Gold rates have surged due to multiple factors and Dhanteras/Diwali gold buying rush is a very small reason. According to a recent report by Tata Mutual Fund, the following factors have contributed to gold price surge:

1. Rupee (INR) depreciation amplifying gold returns
2. Strong demand for gold ETFs, digital gold etc
3. Central bank buying
4. Global uncertainty
5. US Fed rate cut

Resale value

Very often, households exchange old gold jewellery when buying new ornaments. However, the resale value of old ornaments can be less than what you may be expecting based on the market price. This is because jewellers charge making costs and GST at the time of purchase. However, when you go to sell, sellers pay you the current price of the gold after reducing the making charges.

Gold taxation

Any profit from selling physical gold is treated as a capital gain and taxed as follows:

• Short-term gain (sold within 2 years): Taxed at income tax slab rate.

• Long-term gain (sold after 2 years): Taxed at a flat 12.5% (plus surcharge and cess).

The indexation benefit on selling gold is no longer available from July 23, 2024.

When buying gold, you have pay 3% GST on gold value and approximately 5% GST on making charges.

Is this a good time to buy gold now?

Buying any asset is an individual's personal decision. It also depends on the reasons for which you want to buy. For long-term investing, wealth preservation and portfolio diversification, allocating some part of your portfolio to precious metals like gold can be explored. However, it's important to assess your financial goals and risk.

For short-term gains, timing the market is always tricky. Especially at the current prices, one should exercise caution.

Will the gold price continue to rise?

This is a difficult question which we believe no expert can answer with certainty. Historically, the yellow metal has seen drawdowns but consistently appreciated over the long term.

Credit card offers

Many jewellers and online platforms offer discounts on making charges for gold purchased through credit cards. Some credit cards also offer e-vouchers against reward points for purchasing jewellery. For instance, Joyalukkas is offering up to 20% discount on making charges for gold jewellery through HDFC Credit Card. Similarly, SBI card is offering an e-voucher for purchase at Kalyan Jewellers.

Please note above offers may change at the time of purchase. However, if you are planning to buy gold on Dhanteras, it would be wise to check any discount offer on your credit card.