How to buy a gold coin

Written by the team at V. Chetty Radhakrishna Chetty Jewel Craft, Vellore · Serving families since 1860 · Updated August 2026 · About 12 minutes to read

A gold coin is the simplest thing a jeweller sells. There is no design to fall in love with, no fitting, no making charges worth arguing about. Which is exactly why it is the purest way to buy gold — and why the few things that do vary between shops are worth knowing before you walk in.

This guide covers everything a first-time or regular coin buyer in India needs: how to choose a size, how the price is built, where to buy, what the tax rules are, and — the part most guides skip — what actually happens on the day you decide to sell.

Why families buy coins

In our showroom, coin buyers arrive for one of four reasons, and it is worth knowing which one you are before you choose a size.

• Gifting. A gold coin is the standard gift at weddings, seemantham, house-warmings and milestone birthdays across Tamil Nadu. It carries meaning, it never goes out of fashion, and unlike jewellery it does not have to suit anyone's taste.
• Saving in small amounts. Buying a 1-gram or 2-gram coin every few months is how a great many families accumulate gold without ever feeling the outflow.
• Building towards jewellery. Some customers accumulate coins and later exchange them for a wedding set, using the coins as a store of value in the meantime.
• Holding gold as a hedge. Physical gold you can hold is, for many Indian households, a form of security that no financial product replaces.

All four are good reasons. They point to different sizes and sometimes different purities, which is where most of this guide is spent.

Coin, bar, jewellery or digital gold?

All of these are ways to own gold. They differ mainly in how much of your money actually becomes metal, and in how easily you get it back out.

The practical rule we give customers: buy jewellery for what you will wear, coins for what you want to keep. A ₹1 lakh necklace and a ₹1 lakh coin are not the same purchase — after making charges, the necklace contains meaningfully less gold. Neither is wrong; they are answers to different questions.

Coins beat bars for most families simply because they come in small denominations, which makes them easy to gift and easy to sell a little at a time when you need to. Bars only start making sense above 20–50 grams, and by then you are dealing with a sum most households would rather split into several pieces anyway.

On digital gold: it is convenient and it lets you start with ₹100, but you are trusting a platform to hold metal on your behalf, and the buy-sell spread is not always visible. It suits someone who wants exposure to the gold price. It does not suit someone who wants a coin in a locker, or a gift to place in a relative's hand.

Which size should you buy?

Coins are sold from half a gram upwards. The trade-off is straightforward: smaller coins carry a higher percentage premium, because minting a 1-gram coin costs nearly as much in labour, assaying and packaging as minting a 10-gram one — but that cost is spread over one-tenth the gold.

The efficiency argument: ten 1-gram coins and one 10-gram coin contain the same gold, but the ten small coins can cost 4–5% more in total premium. On a ₹1.5 lakh purchase that is several thousand rupees of difference for nothing but convenience.

The flexibility argument: if you may need to sell part of your holding, or you want to give coins to several people, small denominations are worth the premium. You cannot sell a third of a 10-gram coin.

Most families end up with a mix — a few large coins for saving, a handful of small ones for occasions. That is a sensible answer, not a compromise.

24K or 22K coins?

Most investment coins are 24K — 999 purity, the purest gold sold. Because a coin is never bent, clasped or worn, it does not need the hardness that makes 22K the right choice for jewellery. Pure gold is soft, but softness does not matter in a coin sitting in a sealed pack.

Some jewellers also sell 22K (916) coins. These exist mainly for customers who intend to exchange the coin for jewellery later, since the metal is already at jewellery purity and no refining step is needed. If your purpose is saving, 24K is the straightforward choice — you are buying more gold per rupee.

Whichever you buy, the coin should be BIS hallmarked, exactly like jewellery. Purity you cannot verify is not a bargain at any price. Our own coins are 24K 999 and hallmarked — if you want to understand what those marks mean and how to check them yourself, our hallmarking guide walks through it in a couple of minutes.

How a coin's price is actually built

Three components, and an honest jeweller will show you all three:

1. The metal. Weight × today's 24K rate. This is the bulk of the price and it changes daily.
2. The minting premium. The cost of striking, assaying, certifying and packaging the coin — typically 2–8%, higher on small denominations.
3. GST at 3%, charged on the metal and the premium together, not on the metal alone.

Here is a full worked example. To keep it readable we have used an illustrative 24K rate of ₹14,000 per gram — the live rate today is , so treat the structure as the lesson and the numbers as an example.

Read the first and last rows together. Ten 1-gram coins would cost ₹1,55,730; one 10-gram coin costs ₹1,49,968 for the same gold. That ₹5,762 gap is the price of divisibility — sometimes worth paying, but you should know you are paying it.

Two things worth watching:

A "zero premium" offer usually is not. If the premium is waived but the gold rate quoted is above the market rate that morning, the discount has simply moved somewhere less visible. Always compare the final number against the day's published rate — which is exactly why we publish ours openly on the gold rate page every morning.

Packaging is not value. An elaborate presentation box is pleasant for gifting, but it is not gold, and you should not be paying gold prices for cardboard. The tamper-proof assay pack matters; the velvet box around it does not.

Where to buy — and one trap to avoid

You can buy gold coins from a jeweller, from a bank, or from an online platform. They are not equivalent.

From a jeweller

The usual choice, and generally the best one, for a reason most buyers do not discover until years later: a jeweller will buy the coin back. You can see the coin before you pay, ask questions, and build a relationship with a shop that will still be there when you want to sell or exchange.

From a bank

Banks sell hallmarked gold coins and the quality is reliable. But there is a catch that catches a great many people: banks in India are not permitted to buy gold back. Reserve Bank rules allow banks to sell gold coins, not to purchase them. So if you buy from a bank, you will eventually be selling to a jeweller or a bullion dealer anyway — and bank premiums tend to be higher than a jeweller's to begin with.

From an online platform

Convenient, often competitively priced, and fine if the platform is reputable and the coin arrives sealed and hallmarked with an assay certificate. Check the delivery and insurance terms, and check the buyback terms before you buy, not after. Note that you cannot inspect the coin before payment.

Six checks before you pay

1. Is it hallmarked? Look for the BIS mark and the purity grade on the coin or its sealed packaging.
2. Is the seal intact? Coins come in tamper-evident packaging with an assay certificate. Do not accept one that has been opened — an unsealed coin is harder to resell at full value.
3. Does the weight on the bill match the coin? Obvious, but check it, and check the purity stated on the bill too.
4. Is the premium stated separately? If the bill shows only a single total, ask for the breakup. A jeweller confident in their pricing has no reason to hide it.
5. What is the buyback policy, in writing? Ask before you buy, not years later when you need to sell.
6. Are you getting a proper GST invoice? This is your proof of purchase, your proof of purity, and what a future buyer — or the income tax department — will want to see.

GST, PAN and the tax rules worth knowing

• GST is 3% on gold coins, charged on metal plus premium.
• PAN is required for purchases of ₹2 lakh and above in a single transaction. Carry it if you are buying at that level — it is a legal requirement on the jeweller, not an intrusion.
• Cash payments are capped. Indian tax law restricts accepting ₹2 lakh or more in cash in a single transaction. Larger purchases should be made by card, UPI or bank transfer.
• Capital gains apply when you sell. Gold held beyond the long-term threshold is taxed as a long-term capital gain at the applicable rate; gold sold sooner is treated as short-term and added to your income. The holding period and rates have changed more than once in recent years.
• Keep your invoice. Without it, establishing your cost of acquisition years later is difficult, and you may end up paying tax on a gain you did not make.

Tax rules change from budget to budget. Treat this as general orientation, not tax advice — please confirm current thresholds and rates with your chartered accountant before a large transaction or sale.

Storing it safely

A coin is small, valuable and easy to lose — which is a genuine advantage over jewellery, but only if you store it deliberately.

• Keep it sealed. This is worth repeating because it is the mistake that costs the most at resale.
• Store the certificate with the coin. A coin without its assay certificate is worth less, and finding it a decade later is not something to leave to chance.
• A bank locker suits larger holdings. Annual charges are modest relative to the value. Note that bank lockers are not insured by the bank — the contents are your responsibility.
• Home safes are fine for small quantities, provided they are bolted down and not in an obvious place.
• Tell one person you trust where it is. Gold that nobody can find serves no one. Families lose more gold to forgotten hiding places than to theft.
• Photograph the invoice and certificate and keep the images somewhere separate from the coin.

Selling a coin back

This is where the coin earns its reputation. Because there are no making charges to lose, a coin returns close to its full metal value — the gap between what you paid and what you get back is essentially just the premium and the GST you paid at purchase.

What to expect on the day:

• The buyer pays for the metal at that day's rate, not at what you originally paid.
• A sealed, hallmarked coin with its certificate fetches the best price and the fastest transaction — often with no testing deduction at all.
• An unsealed coin will usually be tested for purity, and a small deduction may apply.
• Most jewellers offer better value on exchange (against jewellery) than on an outright cash purchase. If you were going to buy jewellery anyway, exchange is almost always the better route — worth asking about both.
• Bring your original invoice and ID. For larger amounts, payment will be by bank transfer.

We buy back coins at transparent rates, and we tell you the number before you commit to anything.

The best time to buy

The honest answer is that nobody — jeweller, analyst or economist — reliably knows where gold goes next. Anyone who tells you otherwise is selling something. What we can say, from 165 years of watching families buy, is this:

Buying a little regularly beats trying to time the market. Monthly buying averages out the price across good days and bad. It is the reason our advance purchase plan works the way it does — every instalment converts to gold at that day's rate, and coins can be purchased under the plan too.

Festive dates carry a premium in demand, not necessarily in price. The rate is the rate; what changes is how busy the shop is and whether the size you want is in stock.

If you want a specific denomination for Dhanteras or Akshaya Tritiya, reserve it a week ahead. Small coins in particular go quickly, and a shop cannot mint more overnight.

One firm piece of advice: do not borrow to buy gold. It is a store of value, not a return-generating asset, and interest will outrun it.

Seven common mistakes

1. Breaking the seal to look at or show off the coin. It costs you at resale.
2. Losing the certificate. Store it with the coin, and photograph it.
3. Buying only small denominations when the purpose is saving, and paying several thousand rupees of extra premium for divisibility you do not need.
4. Chasing a "no premium" headline without checking the gold rate it is calculated on.
5. Not asking about buyback until the day you want to sell.
6. Paying cash above the legal limit, which creates a problem for both you and the jeweller.
7. Treating coins as a quick investment. Gold rewards patience across years, not months.

Questions we are asked

Which coin size is best?

For gifting, 1 g and 2 g. For saving, 8 g and 10 g, because more of your money becomes gold. Many families keep a mix.

Can I sell a gold coin back to a bank?

No. Banks may sell gold coins but are not permitted to buy them back. Buy from a jeweller who offers buyback.

Is there any difference between a coin and a bar of the same weight?

Only the premium and the packaging. The gold is the same. Bars are marginally cheaper per gram; coins are far easier to gift and to sell in parts.

Do gold coins have making charges?

Not in the jewellery sense. They carry a minting premium, which is much smaller than jewellery making charges — that is the main reason coins are the efficient way to hold gold.

Can I buy coins under a jeweller's saving scheme?

It depends on the scheme; many exclude coins. Ours permits gold coin purchases under the SWARNALAKSHMI plan, while diamonds and silver are excluded. Always check the plan terms.

What if I lose the invoice?

You can still sell the coin, but establishing your purchase cost for capital gains becomes difficult. Ask your jeweller for a duplicate — a shop that has been in one place for generations can usually find the record.

Related guides

• What 916 and BIS hallmarking mean
• Gold making charges and value addition, explained
• How gold saving schemes work