Zakah on gold.
Mu' meneen Brothers and Sisters,
As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)
One of our brothers/sisters has asked this question:
As salaam wa alaikum,
It is such a pleasure to have someone like you who answers to our questions so promptly.
This time my earnest request to you is to show me in simple calculations for paying the zakah on excess gold jewellery. Please explain to me in simple percentage ratio as to how we pay the gold zakat.
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Zakah on gold
In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.
If the total net worth of any believer (man, woman, or child) is more than the prescribed nisaab of 7.5 tolas of gold (app. 85 grams or app. Value US$2,100.00), then the person is liable to pay the obligatory annual zakah of 2.5% on their excess wealth which has been in their possession for a full calendar year.
If the total net worth of any believer is less than the prescribed nisaab, he/she is not liable to pay any zakah until their net worth exceeds the prescribed nisaab.
For the purpose of determining zakah, the Net Excess Assets would be the current market value of all of ones assets (properties, investments, jewelry, cash, etc.) except:
- the value of the house/s one owns and actually lives in (no zakah)
- the value of the car/vehicle one uses on a regular basis (no zakah)
- the value of the furniture and fixtures one uses on a regular basis (no zakah)
Your Question: This time my earnest request to you is to show me in simple calculations for paying the zakah on excess gold jewellery. Please explain to me in simple percentage ratio as to how we pay the gold zakat.
Respected sister, if the total value of your assets (cash, investments, properties, jewelry, etc.) is more than the prescribed nisaab of approximately US$2,100.00.and those assets have been in your possession for a period of one full lunar calendar year, you would be liable to pay zakah on your net excess assets.
Lets assume for this exercise that your total assets are your jewelry (gold, precious stones, etc.), and this jewelry has been in your possession for a period of one full lunar calendar year. You would need to estimate the fair market value of your jewelry, and assuming that the value of your assets (jewelry in this case) is above US$2,100.00 (nisaab), you would be liable to pay 2.50% of the fair market value of your jewelry as zakah for the year.
Thus if you estimate that the fair market value of your jewelry is US$4,000.00; you would be liable to pay 2.50% of US$4,000.00 or US$100.00 as your zakah for the year.
Whatever written of Truth and benefit is only due to Allahs Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.
Your brother and well wisher in Islam,