Gossip is idle talk or rumour about the personal or private affairs of others. It is one of the oldest and most common means of sharing facts, views and slander.
Rumor is an information, often a mixture of truth and untruth, passed around verbally.

Usually The Rumor Takes Birth in a Gossip .

Gossip could be harmless but nevertheless evil ,wasting of time and creating conditions for some evil later on
rumor is downright evil , spreading something which is neither useful or true
Triple filter test for truth could be applied here to filter out truth before conveying the message to the others

Gossip is confined within a room,rumour spreads like a wild fire.

Gossip can happen between a set of known people
Where is Rumour is only hear say

-gossip= between few people
-rumor = spread all over the town

Gossiping is talking some private things about a person in his/her absence. there is no check point to decide whether it is true or false as the person involved is absent from the gossiping area.
Rumor is spread all over the places about some incident which may or may not have taken place in reality like bomb blast, death of some important person, accident. Rumor spreads in public while gossip is restricted in the group of people who are discussing about it.

in both the cases, the news may or may not be wrong.

Rumours with add-up masala and pep-up is gossip it seems.

Gossips se hi rumors felti hai ...