The virtue of discharging zakat in its due time is greatly emphasized in the religion of Allah and must be fulfilled before its time elapses. Since zakat is a method of social solidarity between the rich and the poor, Allah has legislated specific rulings for it.
This article discusses the ruling on the obligatory zakat on gold bullions, the conditions you need to know about it, and answers the most common questions on this subject.
Ruling on Zakat for Gold Bullions
The Islamic ruling on zakat for gold bullions is the same as for other types of gold and its conditions. Gold bullions purchased with the intention of trade or wealth preservation are subject to zakat according to the verse:
(And those who hoard gold and silver and spend it not in the way of Allah, give them tidings of a painful punishment). If the total gold bullions reach the nisab, which is 85 grams or more, zakat is obligatory without dispute.
Is There Zakat on Gold Bullions?
Gold bullions are typically purchased with the intention of preserving wealth or trading in gold because it is fundamentally wealth that is always appreciating. Keeping these bullions without paying zakat on them is not permissible. Once they reach the nisab of twenty mithqals, zakat becomes obligatory after owning them for a lunar year, provided the Muslim’s intention in purchasing them was investment, and the conditions for zakat are met.
Conditions for Zakat on a Gold Bullion
Islam specifies four conditions for zakat on a gold bullion:
- It reaches the nisab of 85 grams of pure gold.
- The intention behind purchasing it is for investment or savings, not for adornment, which is a matter of dispute among Muslim jurists.
- It is surplus to the essential needs of the payer, reaching the level of extravagance and wastefulness.
- A full lunar year has passed since its acquisition.
Nisab for Zakat on Gold Bullions
Islam sets the nisab for zakat on gold bullions at the legal limit for all types of gold, which is estimated at 85 grams of pure, unalloyed gold, at a rate of 2.5% of the total gold collection.
Calculating Zakat on Gold Bullions
The value of zakat on gold bullions is calculated as one-quarter of a tenth, which equals 2.5% of the gold’s total value. If these bullions reach the nisab, their total must be calculated, and zakat or its monetary equivalent must be discharged.
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Frequently Asked Questions about Gold Zakat
What is the zakat on alloyed or mixed gold?
Alloyed or mixed gold of various carats, with 24-carat gold considered pure gold.
Thus, its zakat is calculated based on the amount of pure gold owned without considering any other metals or stones it includes.
Is it permissible to discharge zakat on gold in installments?
Discharging zakat on gold in installments after its obligation is not permissible, as the full right of the poor in zakat must be discharged upon its due time, and zakat on gold should not be paid in installments as it constitutes delay and procrastination in fulfilling the right of the poor.
Is there zakat on the money from sold gold before a year passes?
If the sold gold was for adornment, the rulings on zakat for adornment gold and its judgment should first be considered. If it was sold, zakat on its price is not obligatory unless a lunar year passes, provided the money reaches the nisab alone or with other wealth or trade goods.
If the gold was for savings, zakat is obligatory on it according to the majority of scholars, and its price is subject to zakat without a new lunar year being counted; it is zakated based on its original cycle, which is the possessed gold.
Is zakat on gold calculated based on its raw price or with craftsmanship?
Zakat calculation for gold is based on its announced price without craftsmanship on the day of zakat disbursement to its rightful recipients.
On which gold carat is zakat calculated?
The nisab for zakat on wealth – in Islam – is calculated on 24-carat gold because it represents pure gold; therefore, if there is 18 or 21-carat gold, it is not considered pure gold, and zakat is only due on it if the pure gold in it reaches the nisab.
Is there zakat on personal gold?
Some jurists, including the Hanafis, believe that zakat is obligatory on gold and silver regardless of their form. However, some jurists argue that converting gold from its monetary form to personal adornment items makes it part of clothing, furniture, and personal use items, which are recognized categories exempt from zakat.
What is the ruling on discharging zakat on gold before its time?
There is no harm in discharging zakat before its due time for a legitimate interest, as the Prophet Peace be upon him (PBUH) advanced zakat for his uncle Al-Abbas before its time.
For instance, a Muslim may discharge zakat before its due time if there are needy poor people, for mujahideen, for needy relatives in dire need, or similar situations, all of which is permissible, indeed commendable, and brings much good.
