If you haven’t made any changes in theme files then you can update the theme through wp-dashboard.
Pls go to Appearance > themes
Activate a default theme.
Then delete the old version theme and upload the upated version.
Activate the newly uploaded theme.
You can download the latest version from your themeforest account > downloads tab.
Or if you made any changes then use this method –
The way I update is to replace all files. No matter what method you use (there are plugins too like this – http://wordpress.org/plugins/easy-theme-and-plugin-upgrades/ and http://www.wpexplorer.com/envato-wordpress-toolkit-guide/ to update easily), you will need to backup your changes and redo any changes you made to the files on the new installation.
Use tools like DiffMerge or WinMerge to compare the old and new files and redo the changes. You will spend probably an hour doing this but not more, specially if you have made changes only to a few select files.
The dashboard settings will be retained and hence Custom CSS entered into theme options should be fine. It’s always a good idea to have a backup though. Hope this helps.