Indians have traditionally used gold for investment purposes. Gold is considered a hedge against financial disruptions. However, when you want to sell gold for meeting urgent financial needs, you should be aware of how old gold jewellery is valued. The right knowledge would keep you safe against unscrupulous jewellers. To calculate the value of gold, you have to take it to the nearest assaying or testing laboratory and get its weight and purity tested. The centre certifies gold's purity in Karat or percentage. To calculate the value of the old gold jewellery by the Karat purity method, you have to multiply the gold's weight, purity, and gold rate and divide it by 24. To calculate the value of the old gold jewellery by the percentage purity method, you have to multiply the gold's weight, purity, and gold rate and divide it by 100.
The implementation of GST has particularly affected the prices of commodities like gold.
Effect of GST on Gold Prices
As per the new tax structure, the GST on gold is set at 3% for both finished and unfinished products, which will be paid by the end consumer.
Apart from this, the tax regime also levies an additional 5% on making charges of gold jewellery. The additional charges have upshot the price of gold as there were no making charges in the previous taxation system. This rate is, however, a revised version which was initially set at 18%. The initial GST on making charges would have affected the prices of the finished products massively since end-consumers had to bear all the expenses. However, the 3% GST, the 10% import duty, and 5% making charges have made the yellow metal’s price increase by 0.75%.
In its history of more than 3000 years, never has the value of gold dipped below zero. It has always remained a valuable commodity in the face of the Earth. Gold is a nice option to invest your funds in. Its value not only has remained relatively consistent throughout history, but the demand for it has also been steadily rising. If you are looking to get high returns on your investments, gold is the answer. People also move towards gold whenever recessions occur. In that case, it functions as a hedge against the fluctuations in the market. It is one of the most liquid assets in the world. It can be sold or placed as collateral to obtain funds in return. It is also very storage-friendly. Unlike dealing in the stock market, dealing in gold or identifying its value or quality doesn’t require much skill or expertise as the purity of the gold is also always certified by the seller.
“Karat” is the internationally recognized term used to denote the purity and weight of gold. Higher the Karat, better the purity of gold.
1) 24 Karat: 24 Karat gold is the purest and most expensive form of gold found in the market. Owing to it’s pliability 24-Karat gold is not usually used to make jewellery and is instead used for investment purposes, in the form of coins or bars.
2) 22 Karat: 22 Karat gold is generally used in the jewellery industry. In this type, pure gold is mixed with several alloys like zinc, nickel, or silver to make the gold harder and fit for jewellery. Generally, 22 Karat gold is 91.67% pure.
3)18 Karat: 18 Karat gold is the gold that is prepared by mixing 75% gold with 25% other alloys. 18 Karat gold is the cheapest type of gold available in the market.
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