Need to sell Rs 1L gold jewelry after 1yr for college fees. How much will I actually get?

Question

I bought a gold chain last year for exactly Rs 1L.

Gold prices have shot up by almost 80% since then, and I need liquidity for my son's college admission.

The jeweler says they take a cut, and I heard there are taxes too.

What is the actual math on selling physical gold after a 1yr holding period?

Sachin Kabra · Accepted Answer

Selling physical jewelry comes with a harsh reality check of buyback cuts, taxes, and storage costs that severely eat into your actual return. Let us look at the exact math of selling that Rs 1L necklace after 1yr. Even if the underlying gold price jumped 80% from Rs 8k to Rs 14.5k per gram, given your bought a chain it had all the making charges, gst etc..so you would have actually gotten ~10gms of gold (not 12.5gms). Today, your gross value for 10 grams is around Rs 1.45L. Retail chains typically apply a 4% buyback cut right off the top. This immediately brings your gross value down to Rs 1.42L. Then comes the tax impact. Because you sold physical gold within a 24-month threshold, Short-Term Capital Gains (STCG) tax applies based on your income slab. In this scenario, that tax amounts to about Rs 13k. You also have to factor in the annual bank locker charges of around Rs 1.7k for safe storage. After deducting taxes and locker charges, your net cash in hand drops to about Rs 1.27L. That represents a 27% return, which is significantly less than the 79% appreciation of the actual gold asset itself. Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.

Need to sell Rs 1L gold jewelry after 1yr for college fees. How much will I actually get?

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