Is Zakat obligatory on gold? What are the Zakat rulings for gold? Is Zakat due on saved gold?
All these questions and more will be answered in this article, which discusses the conditions and rulings of Zakat on gold designated for saving or investment, how Zakat is calculated, and concludes with answers to some of the most common questions on this topic.
Ruling on Zakat for Saved Gold
Islam mandates Zakat on saved gold, considering it a growing wealth, as mentioned in Allah’s saying: “And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment.” Hoarding here means not paying Zakat on it.
Therefore, if it reaches the Nisab, which is twenty Mithqals, Zakat becomes obligatory, and anything less than that is not subject to Zakat. Twenty Mithqals equal 85 grams of gold.
Is Zakat Due on Saved Gold?
Thus, saved gold intended for hoarding or trade is subject to Zakat by the consensus of all Muslim jurists, provided it meets the conditions for Zakat set by Islam.
Imam Nawawi stated: “Our companions say: If one makes ornaments and does not intend to use them in a prohibited, disliked, or permissible way, but rather intends to hoard and own them, the correct and predominant opinion of the majority is that Zakat is obligatory on it.”
Conditions for Zakat on Saved Gold
The Shariah conditions for Zakat on saved gold intended for hoarding include four main criteria:
- The primary intention behind its purchase is saving or hoarding.
- It reaches the specified Nisab of 85 grams.
- It is owned by an individual.
- A lunar year has passed since its possession.
Nisab for Saved Gold
The Nisab for gold, whether for adornment, saving, or trade, is twenty Mithqals, equivalent to 85 grams of pure gold, with a Mithqal being 4.25 grams. Therefore, the calculation is 4.25×20= 85 grams.
How to Calculate Zakat on Non-Worn Saved Gold
Zakat on saved gold is calculated at “one-quarter of a tenth or 2.5%” of the total gold, provided it reaches the Nisab, as reported from the Prophet.
How to Pay Zakat on Invested Gold Jewelry Saved with the Intention of Wealth Preservation
Gold kept with the intention of preserving wealth is considered saved wealth and is subject to Zakat. Zakat can be paid in two ways:
- Paying Zakat from the gold itself by calculating “one-quarter of a tenth 2.5%” of the total value of the gold.
- Paying Zakat in cash equivalent to the value of the gold by calculating the market price per gram on the day of paying Zakat, multiplying the price per gram with the total owned gold, and extracting 2.5% of the result.
Masarat for Education and Sustainable Development in Northern Syria
Zakat is an undisputed obligation, mandated by Allah to assist Muslims in helping their needy brethren, and it forms the foundation of community solidarity. By fulfilling your Zakat, you can facilitate communication and maintain social harmony, even in its simplest form.
Pay your gold Zakat through the Masarat Initiative to lend a hand in supporting students in conflict zones who are suffering from the devastating effects of war, and assist them on their path to acquiring knowledge. Masarat tirelessly works to create opportunities for thousands of students to continue their educational journey.
Common Questions About Zakat on Gold:
Should we pay Zakat on gold in gold or cash?
Scholars have permitted the payment of Zakat on gold either directly from the gold itself or its monetary equivalent. Despite some differences among jurists, this has been allowed because gold is considered a form of wealth.
The ruling on absolute gold Zakat
The opinions among scholars vary regarding the obligation of Zakat on gold. Some scholars opine that Zakat is due, while others believe it is not. The correct opinion, which we issue fatwa upon, is that Zakat is obligatory if the gold reaches the Nisab (minimum amount required for Zakat to be due).
The ruling on paying gold Zakat for endowment
The Hanafi school of thought does not consider the following actions as fulfilling the obligation of Zakat. Al-Sarkhasi in “Al-Mabsut” states, “It is not sufficient in Zakat to free a slave, nor to perform Hajj, nor to pay off the debt of a deceased person, nor to cover the expenses of his shrouding, nor to construct a mosque. The fundamental principle in this matter is that the obligation requires the act of giving a portion of wealth, and this act of giving is not achieved except through ownership transfer.”
How to calculate Zakat if it hasn’t been paid for ten years?
Al-Nawawi (may Allah have mercy on him) stated: If years have passed on it—meaning the wealth—and its Zakat has not been paid, then he must pay the Zakat for all of it; whether he knew of the Zakat obligation or not.
Thus, it is obligatory to discharge “a quarter of a tenth” for each past year, decreasing it until the debt is settled. Therefore, “a quarter of a tenth” should be paid for the first year, which will reduce from the penalties on gold, and similarly for the second year until the Zakat for the past ten years is fulfilled.
