Beginner guide · 4-minute read
Gold coins and bars, explained simply
Gold coins and bars are the simplest way to own gold: you buy it and you hold it. There's little design cost compared with jewellery, but you pay GST and a premium, and selling usually means taking a lower price.
Checked on 15 Oct 2026 against RBI's gold price data (Handbook of Statistics, Jul 2026), SEBI's digital gold caution (Nov 2025) and the 2026 SGB tax change.
In one minute
- Where to buy
- Banks, jewellers and refiners. Banks sell coins but don't buy them back.
- Purity
- Look for BIS-hallmarked 24-carat (999) gold.
- Costs
- 3% GST plus a making charge or premium, often 2–4%.
- Tax
- 12.5% on gains after 2 years; your slab rate before that. No ₹1.25 lakh exemption.
How it works, with real numbers
Spend ₹1,00,000 with 3% GST and a 3% premium, and you get about ₹94,340 of gold. Sell it back at 3% below the market price and you'd get about ₹91,509: gold has to rise about 9.3% before you're even.
Over 10 years at 9.7% a year, you'd keep about ₹2,13,933 after tax, against ₹2,16,653 in a gold fund (₹2,720 more).
Try the gold calculatorHow the gold price has moved
Gold averaged ₹1,18,421 per 10 grams in 2025-26, about 17 times its 2005-06 average. Over every 10-year stretch of the last 20 years it grew between 5.7% and 16.1% a year.
- Gold pays no interest, so you gain only when its price rises, and it has had long flat spells: after 2012-13, the yearly average didn't beat that level again until 2018-19.
- The range used here, 7.6% to 12.4% a year (middle 9.7%), is the middle half of those 10-year outcomes, before costs and tax.
- These are yearly averages, so short spikes and dips are smoothed out. RBI notes that prices up to 1999-2000 and from 2000-01 come from different sources, so they may not be strictly comparable.
See how the range is worked out
| 10 years | Grew a year |
|---|---|
| 2005-06 to 2015-16 | 14.4% |
| 2006-07 to 2016-17 | 12.4% |
| 2007-08 to 2017-18 | 11.4% |
| 2008-09 to 2018-19 | 9.2% |
| 2009-10 to 2019-20 | 8.9% |
| 2010-11 to 2020-21 | 9.7% |
| 2011-12 to 2021-22 | 6.4% |
| 2012-13 to 2022-23 | 5.7% |
| 2013-14 to 2023-24 | 7.6% |
| 2014-15 to 2024-25 | 10.7% |
| 2015-16 to 2025-26 | 16.1% |
See every year's price (41)
| Year | Average price, 10 grams |
|---|---|
| 2025-26 | ₹1,18,421 |
| 2024-25 | ₹75,842 |
| 2023-24 | ₹60,624 |
| 2022-23 | ₹52,731 |
| 2021-22 | ₹47,999 |
| 2020-21 | ₹48,723 |
| 2019-20 | ₹37,018 |
| 2018-19 | ₹31,193 |
| 2017-18 | ₹29,300 |
| 2016-17 | ₹29,665 |
| 2015-16 | ₹26,534 |
| 2014-15 | ₹27,415 |
| 2013-14 | ₹29,190 |
| 2012-13 | ₹30,164 |
| 2011-12 | ₹25,722 |
| 2010-11 | ₹19,227 |
| 2009-10 | ₹15,756 |
| 2008-09 | ₹12,890 |
| 2007-08 | ₹9,996 |
| 2006-07 | ₹9,240 |
| 2005-06 | ₹6,901 |
| 2004-05 | ₹6,145 |
| 2003-04 | ₹5,719 |
| 2002-03 | ₹5,332 |
| 2001-02 | ₹4,579 |
| 2000-01 | ₹4,474 |
| 1999-00 | ₹4,394 |
| 1998-99 | ₹4,268 |
| 1997-98 | ₹4,347 |
| 1996-97 | ₹5,071 |
| 1995-96 | ₹4,958 |
| 1994-95 | ₹4,667 |
| 1993-94 | ₹4,532 |
| 1992-93 | ₹4,104 |
| 1991-92 | ₹4,298 |
| 1990-91 | ₹3,452 |
| 1989-90 | ₹3,229 |
| 1988-89 | ₹3,175 |
| 1987-88 | ₹3,082 |
| 1986-87 | ₹2,323 |
| 1985-86 | ₹2,125 |
Source: RBI Handbook of Statistics, Table 35, the yearly average gold price in Mumbai.
Pros and cons
Good things
- You hold it. No app, fund or company in between.
- No yearly fee. The costs come when you buy and sell.
- Useful in a pinch. Gold can be pledged for a gold loan.
Things to watch
- Costly to buy and sell. GST and a premium going in, and a lower price coming out.
- Storage and safety. A bank locker costs money; keeping it at home is a risk.
- Purity and paperwork. Without a hallmark and a bill, you may get less when you sell.
- No interest. You gain only if gold's price rises.
- Long flat spells. After 2012-13, RBI's yearly average price didn't beat that level again until 2018-19.
Is it right for you?
Mistakes to avoid
- Buying from a bank to sell later. Banks don't buy coins back; you'll have to sell to a jeweller.
- Losing the bill. You'll need it to sell easily and to work out your tax.
How to start
- Check the day's gold rate before you buy.
- Buy BIS-hallmarked 24-carat (999) coins or bars, and get a proper bill.
- Store them safely, such as in a bank locker.
Words you'll see
- Hallmark
- BIS's purity mark on gold.
- 24 carat / 999
- 99.9% pure gold.
- Making charge
- What the seller adds for making the coin or bar.
- Buyback
- Selling the gold back, usually below the market price.
This guide explains how things work. It is not advice on what you should invest in. NetReturns is not SEBI-registered.