In this guide
A customer brings in a chain her mother wore for thirty years and asks what it is worth today. It is a fair question with an uncomfortable answer, because the number in her head is the number that was on the bill, and the number she will be offered is built a completely different way.
This guide sets out that second calculation in full, including the lines that reduce what you receive.
Is there a separate rate for old 916 gold?
No. There is no published "old gold rate" anywhere in India. The starting point is the same 22K rate a shop quotes to buyers that morning.
The phrase is worth confronting, because it implies a second, lower price list that jewellers keep for old metal. What exists instead is the day's rate, applied to the gold an assay says is genuinely present, less a deduction for turning an ornament back into usable metal.
The day's rate is public. Today it is per gram for 22K in Vellore (), and you can check today's gold rate in Vellore before you set out. Rates are indicative and confirmed at the time of billing at the showroom.
So compare two offers on the same piece and you are not comparing rates. You are comparing two things: what purity was assessed, and what was deducted. Nearly every disagreement we see across the counter is one or the other, and both can be written down.
Exchange and outright sale are not the same transaction
Handing old gold in against a new purchase and selling gold for money are two different transactions, and they carry different numbers.
In an exchange, the shop is not really buying metal. It is discounting a sale. Your old gold offsets the gold value of the new piece, and the shop still earns on the workmanship of what you are buying. That is why exchange terms are usually the better of the two on the same piece, and why generous-sounding claims about "full value" almost always turn out to be attached to an exchange rather than to a cash sale.
In an outright sale there is no new sale to offset anything. The shop is buying metal it must then refine, fund and hold until it moves. The terms reflect that, and honestly so.
Two consequences before you travel:
- An exchange still leaves you paying the making charges on the new piece. Old gold reduces the gold-value line of the new bill; it does not touch the workmanship line. Our guide to gold making charges and value addition shows how that line is built. How the tax falls when part of the price is settled in old metal is a separate question, and a genuinely unsettled one — our guide to GST on gold sets out what we could and could not establish about it.
- Not every shop buys gold outright at all. Many will only exchange. What we publish is that we test old gold in front of you and put the assessed weight and value on the bill before anything is finalised — against an exchange. If you want a piece settled for money rather than against a purchase, ask first, of us or of anyone, rather than making the journey on an assumption.
The one-sentence version
You are paid for assessed gold content × the day's rate, minus a refining and handling deduction. Making charges and GST are not part of that sum and never come back.
What you do not get back — and the one thing you do not pay
Making charges and GST are spent, not stored. When you bought the piece you paid for three things: gold, workmanship, and 3% GST charged on both of those combined. Only the first has any resale value.
This is the whole reason a resale figure comes as a shock. On a heavily worked bridal set or an antique haaram — a long temple-work necklace — the workmanship can be a substantial share of what you paid, and none of it returns: not partially, not as goodwill, and not at the shop that sold it to you. The resale side is simply the making-charges figure seen from the other end.
The GST behaves the same way. It went to the government rather than to the jeweller, and a retail customer has no mechanism for recovering it on resale.
One thing you do not pay. When an individual sells their own old jewellery to a jeweller, that sale is not made in the course of a business, so it is not a supply and no GST arises on it under the reverse charge mechanism. The tax department clarified exactly this in 2017, shortly after GST came in, having first said the opposite. Nobody should be adding GST to the figure for handing your own gold across the counter.
Whether you owe anything on a gain you have made over the years is a separate income-tax question, and not one we are able to advise you on. That is a conversation for your accountant.
How the purity is assessed
Everything downstream depends on a single number: the purity your piece actually assays at. Move that by a few parts per thousand and the rupees move immediately.
Three methods are in use in India, and they are not equivalent.
| Method | What happens | What it can and cannot tell you |
|---|---|---|
| Touchstone | The piece is rubbed on a dark stone and the streak compared against needles of known purity, often with acid. | Quick, cheap, traditional, and an experienced hand is genuinely good with it. But it reads the surface, it is a judgement rather than a measurement, and it cannot see inside a hollow or filled piece. |
| XRF | An X-ray fluorescence machine reads the composition in seconds without damaging the piece. | The practical working method at any established counter. BIS's own guidelines state plainly that XRF gives the gold content of the surface only, and that the purity it reads may vary by ±5 parts per thousand. |
| Fire assay | A small sample is taken from the piece and analysed by cupellation. | Destructive, and the reference method used worldwide. It is what a purity certificate rests on — BIS does not allow a purity certificate to be issued on an XRF reading alone. |
Five parts per thousand sounds like nothing. On a piece marked 916 it means an honest reading could land at 911 or at 921, and across twenty grams that is real money. It is why the reading should be shown to you on the screen and written down, rather than summarised into a sentence.
You can get an independent reading, and it is not expensive. BIS-recognised assaying and hallmarking centres will test a consumer's own gold. Under BIS's published guidelines the jewellery is weighed in front of you, each article is tagged with a serial number, each is checked by XRF for purity and for prohibited elements such as cadmium and iridium, sampling is done with your consent and with minimum damage, and your pieces — along with any remnants from the sampling — come back to you. BIS's published schedule sets a small per-article fee with a minimum of ₹200 for a lot; confirm the current rate with the centre before you go. If you are about to sell something substantial to a shop you do not know, that report is cheap insurance.
Our guide to gold purity and care covers what the home tests can and cannot prove.
How the deduction is worked out
A proper valuation happens in five steps, and you are entitled to see every one of them.
- Gross weight. The piece goes on a scale you can see, and the reading is spoken aloud or shown to you.
- Non-gold weight comes off. Stones, kemp — the traditional red and green stones set into temple jewellery — lac filling, thread, enamel and the steel in a clasp are not gold and cannot be paid for as gold. This is arithmetic rather than a deduction in the shop's favour, but insist on seeing gross and net weight separately.
- Purity is assessed and applied to the net weight, giving the pure gold content the shop is actually buying.
- The day's rate is applied to that assessed content, at the rate ruling on the day of the transaction — not the day you enquired.
- A refining and handling deduction is applied. Old ornaments have to be melted, refined and re-alloyed before the metal is usable again, and there is a real cost and a real loss in doing it.
We are not going to print a percentage for step five, and you should be wary of any page that does. No regulator sets it, no standard defines it, and it genuinely varies — with the shop, with the condition and construction of the piece, with how much non-gold has to be separated out, and with whether this is an exchange or an outright sale. Any figure we printed here would be quoted back at counters across Tamil Nadu as a norm it has not earned.
What you can do is make it visible. Ask for the deduction as its own line, in rupees and as a percentage, before you agree to anything. A "zero deduction" claim is a statement about one line of a five-line calculation, not about the total — the honest comparison is always the net figure at the bottom.
A worked example
Example: a plain 20-gram 22K bangle with no stones, at an illustrative gold rate of ₹13,255 per gram. The two columns differ only in what the assay came back with.
| Line | If it assays at 916 | If it assays at 890 |
|---|---|---|
| Gross weight | 20.000 g | 20.000 g |
| Non-gold weight | nil | nil |
| Assessed purity | 916 | 890 |
| 22K-equivalent weight | 20.000 g | 19.432 g |
| Gold value at ₹13,255/g | ₹2,65,100 | ₹2,57,575 |
| Refining and handling | ask — in ₹ and % | ask — in ₹ and % |
| Net to you | less that deduction | less that deduction |
Those two columns are ₹7,525 apart on the same bangle, before anyone has deducted a rupee for refining. Nothing separates them but a purity reading. That is the number worth being careful about, and it is the one that can be settled with a machine instead of a conversation.
Why a hallmarked 916 piece values faster
A hallmark does not change what your gold is worth. It changes how quickly anyone can agree with you about it.
An unmarked heirloom has to be established from nothing: assessed, discussed, and priced with some allowance for the assessor's own uncertainty. A BIS-hallmarked piece carries the purity grade and a six-character HUID that anyone can check in the BIS Care app in under a minute. The starting point stops being a claim and becomes a record.
There is a further protection that most sellers never hear about. Under the hallmarking rules, if a hallmarked article is found on testing to be below its marked purity, the buyer is entitled to compensation of twice the amount of the difference calculated on the shortage of purity for the weight sold, plus the testing charges. That liability is precisely why a hallmark carries weight at the assessment stage — somebody has staked money on the number.
Two honest limits, though:
- You cannot have your old gold hallmarked. Only BIS-registered jewellers may present articles to a hallmarking centre. As a consumer you can have gold tested and receive a report; you cannot walk in and have your grandmother's chain stamped.
- A hallmark does not remove the deduction. It removes the argument about purity. Refining and handling still apply.
Our guide on what 916 and BIS hallmarking actually mean walks through reading the marks and verifying a HUID.
What to bring, and what to get in writing
Bring the piece. A photograph is fine for starting a conversation, but nothing can be valued from one — weight and purity are the whole calculation, and neither is visible in an image.
Along with it, if you have them:
- The original bill and tag. Not required, and they will not restore your making charges, but they settle questions of weight and stated purity instantly and make the whole visit shorter.
- Any certificate you hold — an assay report from a hallmarking centre, or a stone certificate for diamonds set into the piece, which are valued separately from the gold and on a different basis entirely.
- Photo identification, and your PAN if the amount is substantial. Income-tax rules require PAN to be quoted on a sale or purchase of goods above ₹2 lakh in a single transaction.
- Bank details. Sizeable settlements are made by cheque or bank transfer rather than in cash, because the law limits how much cash a person may receive in one transaction. It is the same reason the advances under our own purchase plan are refunded by cheque or bank transfer and never in cash.
And before you agree to anything, ask for these five lines on paper:
- Gross weight and net gold weight, shown separately.
- The assessed purity, and which method produced it.
- The rate applied, and the date it applies to.
- The refining and handling deduction, in rupees and as a percentage.
- The net figure payable to you.
Asking is completely normal — we would rather write it down than be remembered wrongly. A shop unwilling to put those five lines on paper is telling you something useful, and you are allowed to walk out and think about it.
Questions we are asked
Is there a different gold rate for old gold?
No. The starting point is the same 22K rate the shop quotes to buyers that morning. There is no separate published price list for old gold anywhere in India. What moves your figure up or down is the assessed purity and the refining and handling deduction, not a special rate.
Will I get back the making charges I paid?
No. Making charges pay for workmanship, and workmanship has no resale value as metal. The GST you paid at the time of purchase is not recoverable either. On resale you are paid for the gold content of the piece and nothing else.
Do I have to pay GST when I sell my old gold?
No. When an individual sells their own old jewellery to a jeweller, that sale is not made in the course of a business, so it is not a supply and no GST arises on it under the reverse charge mechanism. The tax department clarified this in 2017, shortly after GST came in. Anything owed on a gain you may have made is a separate income-tax question, and not one we are able to advise you on.
Is exchanging old gold better than selling it outright?
On the same piece it usually is, because in an exchange the shop is discounting a sale rather than buying metal it must fund and carry. But an exchange only helps if you actually want the new piece, and the making charges on that new piece are payable in full.
Can I get my old gold hallmarked before I sell it?
No. Only BIS-registered jewellers may present articles to a hallmarking centre for hallmarking. As a consumer you can have your gold tested at a BIS-recognised assaying and hallmarking centre and receive a test report, which is the document that is actually useful when you sell.
Bring it in and find out what you own
We weigh old gold in front of you, test it openly, and show you the reading before any figure is discussed. The assessed weight and value go on the bill before anything is finalised, and there is no charge for finding out what you own.