Why do I lose money the moment I buy?

Because making charges and tax pay for craftsmanship and to the government, not for metal. A buyer later pays you for the gold, so anything spent on top of the metal is gone from the moment you leave the shop.

Do making charges really matter that much?

They are usually the largest avoidable cost on the bill, and tax is charged on top of them, so a percentage point of making charge costs slightly more than a percentage point. On these defaults they are about a tenth of what you pay.

Is 22-carat worse value than 24-carat?

Not in itself — you pay for the gold that is present either way. What matters is that a 22-carat piece contains less gold than its gross weight suggests, and a bill quoting the 24-carat rate against the gross weight would be overcharging you.

What about coins and bars?

The same arithmetic applies with much smaller making charges, which is why the break-even rate sits far closer to the rate you paid. Set making charges to what your seller actually quotes.

Gold Purchase Calculator

The rate quoted for gold and the amount on a jewellery bill are two different numbers. Making charges, tax and purity sit between them, and none of that comes back when you sell. This works out what you actually paid per gram, and the rate gold has to reach before selling returns what you spent.

Check the working

A worked example

A fixed case, for reference.

A 10-gram 22-carat piece, at a quoted rate of ₹10,000 a gram, with 12% making charges and 3% tax.

Gold you own
$10 \times \frac{22}{24} = 9.1667\text{ g}$
Metal value
$9.1667 \times 10000 = 91{,}667$
Making charges
$91667 \times 12\% = 11{,}000$
Tax on both
$(91667 + 11000) \times 3\% = 3{,}080$
Total paid
$= 1{,}05{,}747$
Effective cost a gram
$\frac{105747}{9.1667} = 11{,}536$

The rate was ₹10,000 and the effective cost is ₹11,536 a gram — 15.4% higher. Sell the same day and you would receive the metal value of ₹91,667 against ₹1,05,747 paid. Gold has to reach ₹11,536 a gram just to break even, before any buy-back deduction.

The formula

g = w \times \frac{k}{24} \qquad V = g \times R

Rates are quoted for 24 carat, so a piece of carat k contains a fraction k/24 of its gross weight in gold.

T = (V + V m)(1 + t)

Making charges are a percentage of the metal value, and tax applies to the metal and the charges together.

R_{\text{break-even}} = \frac{T}{g \times (1 - d)}

The rate at which selling the gold you own, after any buy-back deduction, returns the total you paid.

What each symbol means

w: gross weight of the piece, in grams
k: purity in carat
g: grams of pure gold you own
R: the quoted 24-carat rate per gram
m: making charges, as a decimal
t: tax on the bill, as a decimal
d: deduction on buy-back, as a decimal
T: the total you pay

What this assumes, and where it stops

Assumptions

The quoted rate is for 24-carat gold, and purity is applied to the gross weight.
Making charges are a percentage of the metal value. Some jewellers charge a flat amount per gram instead, which this does not model.
Tax is charged on the metal and the making charges together, at the rate you enter.
On resale you receive the metal value at the prevailing rate, less any deduction you specify.
Hallmarking fees, stone and pearl weights, and wastage charges are not included, and all of them add to a real bill.

Limitations

Tax rates on gold are set by law and change. The rate here is an input, not a claim about what is current — use the figure on your own bill.
Making charges vary widely by jeweller, design and occasion, and are often negotiable.
Stones set into a piece are charged separately and usually have little resale value. Only the gold is counted here.
Digital gold, gold ETFs and sovereign bonds have entirely different cost structures, and none of this applies to them.
Nothing here forecasts the price of gold or suggests whether to buy it. It prices a purchase you are already considering.

What this calculator does

Converts a gross weight and a carat into the grams of gold you actually own.
Builds the bill: metal value, making charges, and tax charged on both together.
Divides the total by the gold owned, giving the effective cost per gram and how far it sits above the quoted rate.
Solves for the break-even rate — what gold must reach for a sale to return what you paid, after any buy-back deduction.

Common questions

Different questions about the same money. These use the same conventions, so the numbers are comparable.

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