KSA عربي
KSA عربي
Global عربي
Zakat is one of the Five Pillars of Islam, made mandatory by Allah (S.W.T.) upon every Muslim under specific terms and conditions.
Various forms of wealth are subject to Zakat, and gold is one of the key commodities that has specific characteristics for its obligation.
The completion of one full lunar year is required before Zakat becomes due on such wealth. A specific percentage of Zakat on a specific quantity becomes obligatory after the completion of the year.
There are various Shariah bases for the obligation of Zakat; among them, some are as follows:
1- In Tafseer Ibn e Kaseer , Surah Al Baraah, Aayah number 34-35, Maktabah Rasheedia:
"عن ابن عباس رضي الله عنهما قال
لما نزلت هذه الآية: ﴿وَالَّذِينَ يَكْنِزُونَ الذَّهَبَ وَالْفِضَّةَ﴾، كَبُرَ ذلك على المسلمين، وقالوا: ما يستطيع أحدٌ منا أن يَدَعَ لولدِه مالًا يبقى بعده.
فقال عمرُ: أنا أُفَرِّجُ عنكم.
فانطلق عمرُ، وأتبعه ثوبانُ، فأتى النبيَّ ﷺ فقال: يا نبيَّ الله، إنه قد كَبُرَ على أصحابِك هذه الآية.
فقال نبيُّ الله ﷺ: إن الله لم يفرض الزكاة إلا ليُطيِّبَ بها ما بقي من أموالكم، وإنما فرض المواريث في الأموال التي تبقى بعدكم.
قال: فكبَّر عمرُ، ثم قال له النبي ﷺ: ألا أُخبرك بخيرِ ما يَكْنِزُ المرء؟ المرأةُ الصالحةُ، التي إذا نظر إليها سرَّته، وإذا أمرها أطاعته، وإذا غاب عنها حفظته".
رواه أبو داود، والحاكم في المستدرك.
Translation:
Narrated by Ibn ʿAbbas (may Allah be pleased with them both): When the verse “And those who hoard up gold and silver and do not spend it in the way of Allah…” was revealed, it was hard on the Muslims. They said, “None of us can leave any wealth for his children after him.”
ʿUmar (may Allah be pleased with him) said, “I will relieve you of this matter.”
So ʿUmar went forth, followed by Thawban, until he came to the Prophet ﷺ and said, “O Prophet of Allah, this verse has been hard upon your companions.”
The Prophet ﷺ said:
“Allah has not made Zakat obligatory except to purify the wealth that remains with you, and He has only prescribed inheritance for what remains after you.”
Then ʿUmar (may Allah be pleased with him) rejoiced and said “Allahu Akbar!”
The Prophet ﷺ then said:
“Shall I not tell you of the best treasure a person can hoard? It is a righteous woman — when he looks at her, she pleases him; when he commands her, she obeys him; and when he is absent, she guards herself and his property.”
Reference: Narrated by Abu Dawood and al-Hakim in al-Mustadrak.
2- In Sunan Abi Dawood:
عن علي رضي الله عنه عن النبي صلى الله عليه وسلم ببعض أول هذا الحديث قال: «فإذا كانت لك مائتا درهم وحال عليها الحول ففيها خمسة دراهم، وليس عليك شيء يعني في الذهب حتى تكون لك عشرون دينارا، فإذا كانت لك عشرون دينارا وحال عليها الحول ففيها نصف دينار، فما زاد فبحساب ذلك.
(كتاب الزكاة، رقم الحديث:1573، ج:2، ص:10، ط:المطبعة الأنصارية بدهلي-الهند)
Translation:
When you possess two hundred dirhams and a year has passed over them, then five dirhams are due as Zakat.
You are not obliged to pay anything on gold until you have twenty dinars. When you possess twenty dinars and a year has passed over them, then half a dinar is due as Zakat. And whatever exceeds that, its Zakat is to be calculated accordingly.
There are two fundamental conditions for the obligation of Zakat on every individual. The first is Nisab, which refers to a specific minimum amount of wealth — in the case of gold,
85 grams as mentioned in the AAOIFI standard on Zakat. The second condition is the passage of one Hawl (a lunar year of approximately 354 days) while possessing that amount. If both of these conditions are met, Zakat becomes due on the individual.
According to the AAOIFI Shariah standard, 35, “Gold and silver assets in any form: Zakah on such assets is to be assessed on the basis of their net weight or cash value.”
Regardless of the form of gold, scholars assess Zakat on gold based on its net weight. Therefore, if someone possesses gold in the form of jewellery, Zakat will be due on it according to the Nisab.
There are four main categories considered by scholars for the obligation of Zakat:
- Gold (الذَّهَب),
- Silver (الْفِضَّة),
- Currency (النُّقُود),
- Business commodities (أَمْوَالُ التِّجَارَة).
Gold that is owned without the intention of trade is still subject to Zakat, and if it is stored or preserved for investment purposes, then Zakat becomes obligatory upon it.
Read more about: Halal Silver Investment
Gold in any form (bars, jewellery, biscuit and coins) will be subject to the zakat and the gold nisab will be taken in consideration while calculating the zakat.
Regardless of the nature or source of ownership, any gold possessed by an individual will be subject to Zakat if the required conditions for Zakat are met.
1- Determine the ownership and and find the total weight of the gold in grams.
2- Verify the Nisab and check the weight of the gold is 85g or exceed 85g.
3- Verify the Lunar year for the ownership of the gold.
4- Check the expected current cash value of the owned gold.
5- Calculate the gold or expected cash value for the zakat by Multiplying it with 2.5%.
Example Calculation
If you own 150g gold for the complete lunar year. Zakat payable = 150*2.5% = 3.75g of gold or its equivalent cash value will be given in Zakat.
1- Is Zakat due on white gold?
Yes, Zakat is due on white gold, just like any other type of gold. Regardless of its form or color, white gold is subject to Zakat if it meets the required conditions.
2- Should I use the current gold price or purchase price to calculate Zakat?
No current gold price will be used for the calculation of the Zakat.
3- What is Zakat on Combined Wealth "When gold, cash, and silver are combined to meet nisab."
If an individual’s separate holdings are each less than the Nisab, but their combined value exceeds the Nisab of gold, then Zakat becomes due on the total combined wealth. The Hanafi jurists have established the Silver Nisab — 612.3 grams of silver — as the benchmark for determining the obligation of Zakat on collective wealth.
Read more about: Zakat on Investment
4- Can I pay Zakat in cash instead of gold?
yes, Zakat can be paid in cash (currency) equivalent based on the equivalent amount of gold due.
Read more about: Silver Investment vs Gold Investment
References:
i- Tafseer Ibn e Kaseer, Surah Al Baraah, Aayah number 34-35, Maktabah Rasheedia.
ii- (كتاب الزكاة، رقم الحديث:1573، ج:2، ص:10، ط:المطبعة الأنصارية بدهلي-الهند)
iii- https://aaoifi.com/ss-57-the-gold-standard/?lang=en
iv- https://aaoifi.com/ss-35-zakah/?lang=en
Disclamer:
This post is for educational purposes only, and does not constitute investment advice or a solicitation to take any financial action. It should not be relied upon when making investment or financing decisions.
