ZAKAT ON GOLD
Zakat on Gold is obligatory to be fulfilled for any gold in your possession if they have met the corresponding Nisab or Uruf and completed the Haul period. There are two types of Zakat on Gold:
- Gold intended for usage
- Gold not intended for usage.
For gold not intended for usage (gold bars and bullions and gold jewelries meant as investment tools), Zakat is payable if the total weight of gold owned meets the Nisab of 86 grams.
For gold intended for usage (gold jewelries intended to be worn regardless of frequency), Zakat has to be paid if each piece of gold jewelry meets the uruf of 860 grams.
Uruf is the customary practice on level of jewellery owned by a community. The uruf of 860 grams is based on the opinion of Imam An-Nawawi in Al-Majmuk. (Muis Fatwa, 9 June 2011)
CONDITIONS FOR ZAKAT ON GOLD
NISAB OR URUF
Depending on the type of gold that you own, Zakat is payable if the gold that you possess meets the Nisab (for gold not intended for usage) or Uruf (for gold intended for usage).
HAUL
Zakat is only payable if you have completed the Haul, which is a period of 1 Hijri year (355 days). For first-timers, your Haul period begins when your savings account first meets the Nisab. For recurring Zakat payers, Haul period begins from the last Zakat payment date.
ZAKAT ON GOLD (NOT INTENDED FOR USAGE)
Find the value of gold owned:
Current rate of gold (per gram) x Weight of gold owned in grams
If the value of the total gold you own is equal to or above 86 grams, Zakat is required to be paid.
Zakat amount is:
Value of gold owned × 0.025
ZAKAT ON GOLD (INTENDED FOR USAGE)
Find the value of EACH piece of gold:
Current rate of gold (per gram) x Weight of gold owned
If the value of a piece of gold jewelry is equal to or above 860 grams, Zakat is payable.
Zakat amount is:
Value of gold jewelry owned × 0.025
EXAMPLE
(GOLD NOT INTENDED FOR USAGE)
Date of purchase: 12/11/2010
End of Haul: 1/11/2011
Nisab for Nov 2011: $3,800
Total weight of gold not intended for usage: 450 grams
Market price for 1 gram of gold: $44.19
Market price for 450 grams of gold: $44.19 × 450 grams = $19,885.50
Zakat to be paid: $19,885.50 × 0.025 = $497.09
EXAMPLE
(GOLD INTENDED FOR USAGE)
Date of purchase: 12/11/2010
End of Haul: 1/11/2011
Nisab for Nov 2011: $3,800
Weight of a piece of gold jewelry: 900 grams
Market price for 1 gram of gold: $44.19
Market price for 900 grams of gold: $44.19 × 900 grams = $39,780
Zakat to be paid: $39,780 × 0.025 = $994.50
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