The clarity of a diamond relates to the existence and appearance of internal characteristics called inclusions. There is a popular misconception that inclusions, which lower the clarity of diamonds, are called carbon spots, however, this is in fact untrue. Most are actually small fissures created during the natural growth of the stone, another diamond crystal or tiny pieces of the original minerals with which the diamond grew. As such, they are nature's fingerprints and 'hallmarks' of its genuineness.

These inclusions, or other natural features or defects on the surface, will interfere and affect its brilliance or appearance to some extent when looking at lesser clarity grades, the location of the inclusion will also affect this as marks to the centre of the stone will be more apparent to the eye.

When a diamond's clarity is graded, the stone is viewed from above at a magnification of 10 times the original size. This allows the grader to study the diamond's internal characteristics. Judgements are made on the basis of five clarity factors indicated by the size, number, position, nature and colour (or relief) of the diamond's inclusions. The clarity grade is assessed on the most noticeable of these, which means that less significant inclusions are ignored for the purposes of setting the grade.

Grading Definition
F Flawless - The diamond shows no inclusions or blemishes of any sort under 10x magnification. Truly flawless or internally flawless diamonds are very rare.
IF Internally Flawless - The diamond has no inclusions under 10x magnification, but will have some minor blemishes.
VVS1, VVS2 Very, Very Slightly Included - The diamond contains some minute inclusions that are difficult even for the experienced grader to see at 10x magnification.
VS1, VS2 Very Slightly Included - The diamond contains some minute inclusions such as small crystals, clouds or feathers when observed with effort under 10x magnification.
SI1, SI2 Slightly Included - The diamond contains inclusions (clouds, included crystals, knots, cavities and feathers) that are noticeable under 10x magnification.
I1, I2, I3 Included 1 - The diamond contains inclusions (possibly large feathers or large included crystals) that are obvious under 10x magnification and may affect transparency and brilliance.