The 2024 duty cut reshaped India's gold economics and 2025-26 reshaped the products: import duty fell from 15% to 6%, the Sovereign Gold Bond stopped issuing new tranches, and digital-gold platforms grew into a mainstream route. The "save 17%" claim circulating in the gold content world survives verification only partially — it decomposes into components you can actually check, and against some routes it shrinks to single digits. This page is the route map with every levy attached.
What does each route cost?
- Physical jewellery: gold value + 3% GST + making charges (typically 8–25%, and up to 35% for intricate work) + 5% GST on those making charges + wastage. Resale runs below retail: you recover gold value minus purity-check deductions and the shop's spread. Jewellery is consumption that happens to hold value — fine as jewellery, weak as an investment.
- Coins and bars (BIS-hallmarked, from banks' or refiners' own counters): gold value + 3% GST + a small premium (typically 2–6% over bullion value). No making charges worth the name. Resale at bullion rates minus assay costs. This is the honest physical route.
- Gold ETFs: gold value via exchange + brokerage + the fund's TER (roughly 0.5–0.8% a year for the large ones) + demat requirement. No GST, no making charges, no purity risk, market-price liquidity.
- Gold mutual funds (FoFs): the ETF's costs plus the FoF's own TER — a second expense layer for investors without demat. Convenient; more expensive.
- Digital gold (platforms): gold value with buy-sell spreads of roughly 0.5–6% depending on platform, no TER but no SEBI regulation either — the platform and its custodian are the counterparties. Fine in size; concentration risk in size.
- Sovereign Gold Bonds: no new issuances since February 2024 — the government pivoted after the duty cut and has kept the programme on pause. Existing bonds run to maturity with their 2.5% interest and tax-free redemption; new money cannot enter this wrapper any more. Secondary-market SGBs trade at market prices — sometimes at discounts, which is the only way into the wrapper now.
Every route, every levy
The upfront and ongoing costs per route, with the exit note. The 'save 17%' decomposition follows directly from the making-charges rows.
View the numbers as a table
| Route | Upfront cost over gold value | Ongoing | Exit |
|---|---|---|---|
| Jewellery | 3% GST + 8-25% making + 5% GST on making | — | Below retail; purity deductions |
| Coins/bars (hallmarked) | 3% GST + 2-6% premium | — | Bullion rates minus assay |
| Gold ETF | Brokerage | TER ~0.5-0.8%/yr | Market price on exchange |
| Gold FoF | — | ETF TER + FoF TER | NAV, T+ settlement |
| Digital gold | Buy-sell spread 0.5-6% | — | Platform buyback at spot |
| SGB (secondary only) | Market price (sometimes a discount) | 2.5% interest | Tax-free redemption at maturity |
Verified 29 October 2026 (sources below); making-charge ranges and platform spreads are market observations, not quotes.
The "save 17%" claim, decomposed
The number is real in exactly one comparison: versus high-making-charge jewellery. The arithmetic: skip making charges of ~15% (plus the 5% GST on them, ≈0.75%) and buy at near-bullion prices instead — and the saving lands around 15–17% against a typical high-street jewellery purchase. Against coins and bars, the same choices save 2–6%. Against an ETF bought at exchange prices, the "saving" versus the jewellery counter is the same 15%+, but the comparison the number never states is this: it is a making-charges-avoided number, not a market-timing alpha. Buy the same gold at the same price through any low-friction route and the 17% is already yours; no strategy required beyond refusing to pay 20% for the smithing.
The tax side for FY27
Physical gold and gold ETFs held long enough now sit at 12.5% LTCG without indexation for transfers after 23 July 2024 (with the pre-23-July acquisition option between 12.5% without and 20% with indexation for individuals); gold fund-of-funds have their own holding-period path — the table on our tax hub carries it. SGB redemption remains tax-free at maturity for individuals, which is part of what made the wrapper attractive while it lasted. Jewellery sold at a gain carries the same LTCG mechanics plus the practical burden of proving cost.
The route decision, in three questions
- Is it for wearing? Buy jewellery you love, at the lowest making charge you can negotiate, and accept the consumption framing.
- Is it for holding? ETFs through a demat account are the default: lowest all-in cost at size, market liquidity, no purity risk. FoFs without demat; digital gold in small sizes with a platform you've checked.
- Is it for a goal with a date? The SIP mechanics apply to gold ETFs too — and the allocation question (how much gold belongs in a portfolio at all) matters more than the route. Our multi-asset page shows funds that hold the gold sleeve for you.
Educational content, not financial advice. Duty (15%→6%, July 2024), GST (3% on gold, 5% on making charges) and the SGB new-issue hiatus verified on 29 October 2026 against the sources below; making-charge ranges and platform spreads are market observations with ranges quoted, not quotes for any shop or app. The 17% decomposition is arithmetic on stated components. Check BIS hallmarking and current levies at purchase time.