Understanding Zakat on Gold and Silver:
Zakat, a cornerstone of Islamic finance and one of the Five Pillars of Islam, is a compulsory act of charity that holds deep spiritual and social significance. This practice, rooted in Islamic tradition, goes beyond mere financial obligation; it is a demonstration of faith and a means to purify one’s wealth. In essence, Zakat symbolizes the commitment of Muslims to social justice and to alleviating poverty, playing a pivotal role in communal welfare.
The definition of Zakat is multifaceted, encompassing both spiritual cleansing and social responsibility. Literally translated as “that which purifies,” Zakat is levied on various forms of wealth, including gold and silver, cash, investments, and business commodities, with the aim of redistributing wealth and reducing economic disparity. The calculation of Zakat hinges on the Nisab (the minimum amount of wealth a Muslim must possess to be eligible to pay Zakat) and the Hawl (the lunar year). This traditional practice underscores the Islamic ethos of empathy and communal support, fostering a sense of brotherhood and solidarity within the Muslim community.
The significance of Zakat in Islamic tradition cannot be overstated. It is not only a religious duty but also a tool for social change. By obligating the financially capable to support the less fortunate, Zakat serves as a means to cleanse one’s wealth, contribute to societal equilibrium, and uphold the Islamic principle of caring for one’s community. It is a divine injunction that enhances spiritual growth and encourages a balanced, ethical approach to wealth management.
In summary, Zakat stands as a testament to Islam’s holistic approach to spirituality and social responsibility, intertwining moral obligations with financial practices. It is a powerful reminder of the potential of shared resources to transform lives and communities, resonating with the core Islamic values of compassion and generosity.
Evidence for Zakat on Gold and Silver:
There are a number of texts from the Quran, the Sunnah, and Āthār of the Salaf, and Ijmā‘ that pertain to Zakat on Gold and Silver.
Firstly, the evidence from the Quran are all general and pertain to two main things 1) the prohibition of hoarding gold and silver, and 2) the obligation to pay Zakat in general and on things “taken from the earth” in particular. For instance, Allah Almighty says: ‘And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment’ [At-Tawbah: 34]. This is a general prohibition from hoarding gold and silver. The other pertinent verse from Surah Al-Baqarah, verse 267, “O you who have believed, spend from the good things which you have earned and from that which We have produced for you from the earth,” can be understood as generally applicable as gold and silver are from the good things that have been earned and are extracted from the ground.
Secondly: From the Sunnah it is collected by Abu Dawud in his Sunan from Ali, may Allah be pleased with him, that the Prophet, peace and blessings be upon him, said: ‘There is nothing upon you – meaning in gold – until you have twenty dinars. If you have twenty dinars and a year passes, then half a dinar is due on it, and whatever increases, calculate accordingly’)). Additional, it is collected by Al-Bukhari from Anas bin Malik, may Allah be pleased with him, “that Abu Bakr, may Allah be pleased with him, wrote for them: ‘These are the obligations of charity which the Messenger of Allah, peace and blessings be upon him, ordained”, and in it: “And in silver coinage, one quarter of one tenth is due; if the wealth is one hundred and ninety dirhams then nothing in it unless its owner wishes.” Al-Nasāī collects in his Sunan from Abu Bakr bin Muhammad bin Amr bin Hazm, from his father, from his grandfather: “…that the Messenger of Allah, peace and blessings be upon him, wrote to the people of Yemen a book in it the obligations and the Sunan and the blood-monies, and sent it with Amr bin Hazm, and it was read to the people of Yemen”, and in this book: “And for every five Uqiya of silver, five Dirham are due; whatever increases in that, then for every forty dirhams, one dirham is due. Nothing is due on less than five Uqiya. And for every forty dinars, one dinar is due. Note: An Uqiya is a measure that equals 40 dirhams, so 5 Uqiya would be 200 dirhams. Five dirhams from 200 hundred is equal to 2.5%. One dinar from forty is also 2.5%.
Thirdly: That Zakat on Gold and Silver are obligatory is a point of consensus reported by Ibn Rushd, Ibn Qudamah, and Al-Shawkani.
Thirdly: From the Āthār (traditions) of the Salaf there is the statement of Ali, may Allah be pleased with him, who said, “There is nothing in less than twenty dinars, and in twenty dinars half a dinar, and in forty dinars a dinar” From Ibrahim Al-Nakha‘ī, a student of the companions who died 717 CE / 96 AH, who said: The wife of Abdullah ibn Mas‘ūd had a necklace with twenty mithqāl, so he ordered her to pay five dirhams for it.” These narrations are mentioned by Ibn Abī Shaiba, Abu ‘Ubaid, and others. The point of mentioning these narrations is that the companions actively applied these rules to their gold, silver, and jewelry, and as al-Imam al-Sarakhsi said in his Usūl, “There is no disagreement among our earlier and later scholars that the statement of one of the Companions is a proof in matters where analogy has no place in determining the ruling, such as in quantities that cannot be known by opinion.” (Usul Al-Sarakhsi, 2/110).
Is Jewelry included?:
As we’ve seen in the previous section, there were companions who obligated Zakat on Gold jewelry as well as silver jewelry. So that you as the read are clear, there is a variance of opinion as to whether Zakat on Gold and Silver jewelry is an obligation or not. This variance of opinion is well-known and has been recognized since the time of the Companions, may Allah be pleased with them. Caution and care in acts of worship is a laudable trait. Each group of scholars has their evidences for the position they have taken, and so your obligation is, when deciding what you do, to choose the position and opinion that you feel will allow you to fulfill your obligation to Allah, make an informed choice, and make you the safest on the Day of Judgment.
The majority view among the Shafi’i, Hanbali, and Maliki schools is that there is no Zakat on jewelry prepared for permissible use, and this is reported from five of the Companions, may Allah be pleased with them. The official position of the Hanafi school, as well as an opinion of Imams Al-Shafi’I and Ibn Hazm is that Zakat is obligatory on jewelry in all cases, and there is no doubt that this is the safer and more cautious approach. Modern scholarship finds itself echoing these two opinions. Personally, I lean towards the opinion that you must pay Zakat on Gold and Silver in all situations, jewelry included.
If you choose the position that you should pay Zakat on Gold jewelry and silver jewelry, remember that Zakat is an obligation on the actual wealth itself. So, someone who has jewelry that is subject to Zakat must pay Zakat from either the gold or silver itself by giving away a 2.5% of that gold or silver, or by giving away the equivalent of its value in their local currency. To pay in its value, appraise the value of the gold or silver in your local currency at the time of paying Zakat and give away 2.5% of its value. We’ll cover some examples In the next article.
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