How Gold Price Is Calculated in India: Formula, Import Duty, GST and a Worked Example (2026)
How Gold Price Is Calculated in India: Formula, Import Duty, GST and a Worked Example (2026)
By Om Kumar · Updated October 29, 2026 · 7 min read
Every morning someone in your family asks the same question: "Aaj sona kitne ka hai?" The answer on the jeweller's board looks like a random number. It is not. The gold rate in India is built from a few clear pieces, and once you know them you can work it out yourself on a phone calculator.
This guide shows you the exact formula, what each piece means, and a full worked example using real rates from October 29, 2026.
The formula in one line
Then add 3% GST when you buy, and making charges if it is jewellery.
That is it. Now let us break down each part.
Step 1: The international gold price
Gold is traded worldwide in US dollars per troy ounce. This is the "spot price" you see on charts and news, written as XAU/USD. It moves every second based on interest rates, the US dollar, central bank buying and global fear or calm.
You can follow it live on our live gold chart.
Step 2: Convert ounces to grams
One troy ounce is 31.1035 grams. It is slightly heavier than a normal ounce, so do not use 28.35. Divide the dollar price by 31.1035 to get the price of one gram in dollars.
Step 3: Convert dollars to rupees
Multiply by the USD/INR exchange rate. This is the step most people forget, and it matters a lot. If the rupee weakens, Indian gold gets costlier even when the international price is flat. Check the current rate on our USD/INR converter.
Step 4: Add import duty
India imports almost all of its gold, so the government charges customs duty on it. Since May 13, 2026, the effective import duty is 15%: 10% basic customs duty plus a 5% Agriculture Infrastructure and Development Cess. Before that it was 6%. This one change made Indian gold noticeably more expensive overnight.
Note: In August 2026, reports said the government was discussing a possible cut, but no change had been announced as of mid-October 2026. Always check the latest rate.
Step 5: Add GST and making charges
When you actually buy, 3% GST is added. For jewellery, the jeweller also adds making charges, usually a percentage of the gold value or a fixed amount per gram. Simple chains may carry lower charges; detailed designs can carry much higher ones. GST is normally charged on the gold value plus making charges together.
Worked example with today's rates
Here is the calculation using rates on October 29, 2026: gold near $4,027.66 per ounce and USD/INR near 95.34.
| Step | Calculation | Result |
|---|---|---|
| Price per gram in USD | 4,027.66 ÷ 31.1035 | $129.49 |
| Price per gram in INR | 129.49 × 95.34 | ₹12,346 |
| After 15% import duty | 12,346 × 1.15 | ₹14,198 per gram |
| 24K, 10 grams | 14,198 × 10 | ₹1,41,977 |
For lower purity, multiply by the gold content:
| Purity | Gold content | Per gram | Per 10 grams |
|---|---|---|---|
| 24K | 99.9% | ~₹14,198 | ~₹1,41,977 |
| 22K | 22/24 (91.6%) | ~₹13,015 | ~₹1,30,145 |
| 18K | 18/24 (75%) | ~₹10,648 | ~₹1,06,482 |
These are import parity values before GST and making charges. Real market rates in India can sit above or below this, because local demand creates a premium or a discount.
What a real jewellery bill looks like
Say you buy a 10-gram 22K chain and the jeweller charges 12% making. Using the numbers above:
- Gold value (22K, 10 g): ₹1,30,145
- Making charges at 12%: ₹15,617
- GST at 3% on both: ₹4,373
- Total bill: about ₹1,50,135
Notice that making charges alone added more than three times the GST. That is the one number you can actually negotiate.
What moves the gold rate in India
- International price: at today's levels, every $10 move in gold changes the price of 10 grams of 24K by roughly ₹350.
- The rupee: every ₹1 move in USD/INR changes the price of 10 grams of 24K by roughly ₹1,490. This is why a weak rupee hurts Indian buyers so much.
- Import duty: a government decision can shift prices by thousands of rupees in one day, as happened in May 2026.
- Local demand: during weddings and festivals, dealers may charge a premium. In slow periods, gold can trade at a discount.
5 tips before you buy gold
- Check the hallmark. Look for the BIS mark, purity grade (like 22K916) and the 6-digit HUID code on every piece.
- Ask for the making charge in writing before the bill is made, and compare two or three shops.
- Work out the base price yourself using the formula above, so you know if the board rate is fair.
- Watch the rupee as well as gold. A stronger rupee week can be a better time to buy than a lower-gold week.
- Keep the bill. You will need it for resale, exchange and tax records.
Frequently asked questions
What is the formula for gold price in India?
Rupee price per gram = international price per ounce ÷ 31.1035 × USD/INR, then increased by import duty (15% since May 13, 2026). GST of 3% is added when you buy.
What is the import duty on gold in India in 2026?
Since May 13, 2026, it is 15%: 10% basic customs duty plus 5% AIDC. It was 6% before. Rates can change, so check the latest notification.
How much GST is charged on gold jewellery?
3%. On a jewellery bill, jewellers usually apply it to the gold value plus making charges.
Why is the gold rate different in every city and shop?
The base is the same, but transport, dealer margins, local demand and making charges differ. Indian prices can also trade at a premium or discount to the import parity price.
Does a weaker rupee make gold costlier in India?
Yes. Gold is priced in dollars, so a weaker rupee means you pay more even if the international price does not change.
Related: Live gold chart · USD/INR converter · Why your bank's rate differs from Google's
Sources: Reuters, May 12, 2026 (import duty change); World Gold Council, India gold market update. Spot gold and USD/INR as shown on FX Rate Live on October 29, 2026.
This article is for general information only and is not financial or investment advice. Gold prices, exchange rates, duties and taxes change. Confirm the final price with your jeweller. See our Disclaimer.
