Islam is the greatest of the heavenly religions and it is the only religion that Allah SWT accepts as it is the religion of all the prophets, starting from our master Adam until the final Prophet Muhammad, PBUH. The Islamic religion urges us to adorn ourselves with noble morals, take care of the poor and the needy and show compassion amongst ourselves, so that Allah SWT may have mercy upon us and forgive us. There exist five essential pillars of Islam which are the Shahadatain, Salah, Zakat, fasting Ramadan and performing Hajj to the Kaaba for those who are able to find a way. We will discuss in this article one of the most important of these pillars which is Zakat and we will learn how to calculate Zakat on gold.
Zakat on gold
There are two types of Zakat: Zakat al-Fitr which becomes obligatory at the end of the month of Ramadan and Zakat al-Mal which manifests in numerous forms including Zakat on crops and fruits, gold and silver and other commercial assets, illustrating that gold is subject to the rulings of Zakat. But how do you calculate Zakat on gold? The calculation of Zakat on gold is performed after a specific set of conditions are met which we will clarify in detail in the next few lines.
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Conditions for Zakat on gold
There are fundamental conditions that must be fulfilled for Zakat on gold to become obligatory upon Muslims, including the passage of a lunar year over it which is a complete Hijri year and that it reaches the Nisab, estimated at approximately 85 grams of pure gold. Furthermore, scholars have differed among themselves regarding the obligation of Zakat on gold according to its use, whether it is used for the purpose of adornment, or whether it is saved for commercial objectives.
How Do You Calculate Zakat on Gold?
How do you calculate Zakat on gold? This stands as one of the most common questions that crosses the minds of a large number of individuals. You can calculate the Zakat on gold easily by knowing the number of grams of gold that you possess, knowing the current price per gram and then multiplying the number of grams by the price per gram to convert it into monetary value. After that, you multiply the monetary value by 2.5% and by doing so, you ascertain the actual amount that you are required to pay.
Why is Zakat obligatory on gold?
Zakat on gold is considered obligatory because gold represents wealth that is capable of increase and growth and is owned by the individual. Zakat offers numerous benefits to the person himself and to society as it protects the individual from greed, selfishness and avarice and cultivates within his soul the love for others and empathy for the poor and needy. It also mends hearts, enhances values and good morals and reduces any malice that might exist in the heart of the poor towards the rich.
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Do you pay Zakat on savings every year?
Yes, Zakat must be paid out on saved wealth as long as it reaches the Nisab after the passage of a Hijri year and this action is performed every year; however, Zakat on crops and fruits is due at the time of harvest, even if the harvested produce remains for years.
Is the value of Zakat on gold today the same as in the era of the Prophet PBUH?
The Zakat on gold today remains the same as the Zakat on gold during the era of the Prophet, where it is required to give out 2.5% of the savings that you possess. However, what differs from one time to another is the price per gram of gold which may cause the monetary value of the Zakat to change from time to time depending on the current price of gold.
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Can Zakat be given to non Muslims?
It is not permissible to give Zakat from the wealth of Muslims to non-Muslims because the Muslim has priority. It has been narrated from Ibn Qudamah, may Allah have mercy on him, that he said: “We know of no difference of opinion among the people of knowledge that Zakat on wealth is not given to a Kafir (non-believer) nor to a slave.”
Ibn al-Mundhir said: “All the people of knowledge from whom we have preserved reports have unanimously agreed that the Dhimmi is not given anything from the Zakat of wealth.” This is because the Prophet, PBUH, said to Mu’adh:
«أَعْلِمْهُمْ أَنَّ عَلَيْهِمْ صَدَقَةً تُؤْخَذُ مِنْ أَغْنِيَائِهِمْ، وَتُرَدُّ فِي فُقَرَائِهِمْ»
[“Inform them that a charity (Sadaqah, meaning Zakat here) is due upon them, to be taken from their wealthy and returned to their poor.”]
Is Zakat obligatory on gold jewelry designated for personal use?
Scholars have indeed differed regarding this matter; some of them held the view that Zakat is not obligatory which is the opinion of the majority and this position was narrated from five senior Companions, namely Ibn Umar, Anas, Aisha, asma, and Jabir may Allah be pleased with them. Ahmad ibn Hanbal adopted this view in the apparent position of his madhhab as did Al-Shafi’i in one of his two opinions and Malik ibn Anas. This is because this jewelry used for personal adornment does not fulfill the condition of being wealth capable of growth as it is utilized for ornamentation.
Conversely, some scholars opined that Zakat is obligatory on all types of gold as long as it reaches the Nisab, whether it is saved or used, such as Umar, Ibn Abbas, Abdullah ibn Amr ibn Al-‘As, Ibn Mas’ud, Sa’id ibn Jubayr, Ibn Sirin, Al-Zuhri, ‘Ata’, Mujahid and Al-Thawri may Allah be pleased with them.
Who is not eligible for Zakat?
The wealthy who possess their daily sustenance, those relatives whose maintenance is obligatory upon you such as children, wives and parents and the household of the Prophet, PBUH. Furthermore, Zakat is not permissible for non-believers, Ahl al-Dhimmah (protected non-Muslims under specific historical contexts).
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What’s the difference between Zakat and Sadaqah?
Zakat constitutes a pillar of the religion and its payment is mandatory, otherwise the Muslim incurs sin and it has a specific amount, such as Zakat al-Mal. Sadaqah, on the other hand, is a voluntary act intended to seek the pleasure of Allah and is not obligatory.
Is there a penalty for not paying Zakat on gold?
Yes, undoubtedly there exists a severe penalty from Allah for the one who does not pay Zakat, especially if this gold represents saved wealth used for trade. The evidence for this is the saying of Allah SWT in His holy Book:
{وَالَّذِينَ يَكْنِزُونَ الذَّهَبَ وَالْفِضَّةَ وَلا يُنفِقُونَهَا فِي سَبِيلِ اللَّهِ فَبَشِّرْهُمْ بِعَذَابٍ أَلِيمٍ يَوْمَ يُحْمَى عَلَيْهَا فِي نَارِ جَهَنَّمَ فَتُكْوَى بِهَا جِبَاهُهُمْ وَجُنُوبُهُمْ وَظُهُورُهُمْ هَذَا مَا كَنَزْتُمْ لِأَنفُسِكُمْ فَذُوقُوا مَا كُنتُمْ تَكْنِزُونَ}
(Wallazeena yaknizoonaz zahaba wal fiddata wa laa yunfiqoonahaa fee sabeelil laahi fabashshirhum bi’azaabin aleem. Yawma yuhmaa ‘alaihaa fee naari jahannama fatukwaa bihaa jibaahuhum wa junoobuhum wa zuhooruhum haaza maa kanaztum li anfusikum fazooqoo maa kuntum taknizoon)
[And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment. On the Day when it will be heated in the fire of Hell and branded therewith will be their foreheads, their flanks and their backs, [it will be said], “This is what you hoarded for yourselves, so taste what you used to hoard.”]
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