Zakat is one of the fundamental obligations in Islam and applies to specific types of wealth when they reach a minimum threshold (nisab) and are held for one lunar year. Below are detailed answers to common questions regarding zakat on gold, silver, and cash.
1. Does impurity (alloy) and polish count in the weight of gold jewelry?
In the calculation of zakat, the general principle is that the dominant material is considered. If gold or silver is the primary component of the jewelry and impurities (alloys) or polish are minimal, then the entire weight of the item is counted when calculating zakat.
This means that small amounts of mixed metals or external polish do not need to be deducted. However, if the impurity is significant and reduces the actual gold content considerably, then only the net gold content should be taken into account.
In practice, most jewelry is treated as zakatable based on its total weight, unless there is clear evidence that non-gold material forms a substantial portion.
2. Is zakat calculated based on purchase value or current market value?
Zakat is always calculated based on the current market (resale) value, not the original purchase price.
This means:
- You should determine how much your gold or jewelry is worth today in the market.
- The resale value is used, even if it is lower than what you originally paid.
- Common deductions (such as a 20–25% reduction in resale price) are naturally reflected in the market valuation.
Once the current value is determined, you calculate 2.5% (1/40) of that amount as zakat.
3. What is the minimum amount (nisab) for gold?
If a person owns only gold (and no cash, silver, or trade goods), then zakat becomes obligatory when the gold reaches:
- Approximately 87.48 grams (equivalent to 7.5 tolas)
If the gold is below this threshold and there are no other zakatable assets, then zakat is not required.
However, once the gold reaches or exceeds this amount and is held for one lunar year, zakat becomes obligatory.
4. What if gold is less than nisab but cash is available?
This is an important and commonly misunderstood issue.
If a person owns:
- Some gold (even less than 87.48 grams), and
- Cash, silver, or business goods beyond basic needs,
Then all assets are combined for zakat calculation.
In this case:
- The nisab is not based on gold, but on the value of silver.
- The silver nisab is approximately 52.5 tolas (around 612–613 grams of silver).
So:
- You calculate the total value of gold + cash + other zakatable assets.
- If the total equals or exceeds the value of the silver nisab, zakat becomes obligatory on all assets combined.
This means even a small amount of gold becomes zakatable when combined with sufficient cash or other wealth.
Additional Conditions
Zakat becomes obligatory only when:
- The wealth remains in your ownership for one full lunar year, and
- Your net assets (after deducting debts) still meet or exceed the nisab.
If debts reduce your wealth below the nisab, then zakat is not required.
Summary
- Impurity and polish: Counted if gold is the dominant material.
- Valuation: Based on current market/resale value, not purchase price.
- Gold nisab (alone): 87.48 grams.
- Combined assets: Use silver nisab; include gold, cash, and other wealth together.
- Zakat rate: 2.5% annually after one lunar year.
