Obligatory currency is subject to zakat as it can be used to co-operate with gold and silver. Money is either paper, coins or equivalent with gold and silver as a purchasing power.

Nisab gold zakat is based on the present value of the gold nisab of 20 mithqal (85 grams) or silver (595 grams). Jumhur fuqaha has relied on nisab of money to nisab of gold (85 grams).

Obligatory obligations of Zakat:

Verse in Quran:

وَٱلَّذِينَ يَكْنِزُونَ ٱلذَّهَبَ وَٱلْفِضَّةَ وَلَا يُنفِقُونَهَا فِى سَبِيلِ ٱللَّهِ فَبَشِّرْهُم بِعَذَابٍ أَلِيمٍۢ ۝٣٤

“O you who have believed, indeed many of the scholars and the monks devour the wealth of people unjustly and avert from the way of Allah. And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment.”
(Surah At-Tawbah : Verse 34)

Rasulullah S.A.W said;

“Saidina Ali telah meriwayat bahawa Nabi Muhammad s.a.w telah bersabda: “Apabila kamu mempunyai 200 dirham dan telah cukup haul (genap setahun) diwajibkan zakatnya 5 dirham , dan tidak diwajibkan mengeluarkan zakat (emas) kecuali kamu mempunyai 20 dinar (salah satu matawang zaman dahulu yang digunakan di negara Arab). Apabila kamu mempunyai 20 dinar dan telah cukup haulnya diwajibkan zakatnya setengah dinar. Demikian juga kadarnya jika nilainya bertambah dan tidak diwajibkan zakat bagi sesuatu harta kecuali genap setahun.”
(Hadis riwayat Abu Daud)

Rasulullah S.A.W said;

“Setiap pemilik emas dan perak yang tidak menunaikan haknya maka pada hari kiamat dijadikan kepingan lalu dibakar dalam api neraka kemudian diselar rusuk dan belakang mereka; setiap kali kepingan itu menjadi sejuk ia kembali dibakar semula pada hari yang kadarnya bersamaan dengan lima puluh ribu (50,000) tahun sehingga ia dihukum di antara hamba-hamba Allah maka dilihat jalannya sama ada ke syurga atau ke neraka”.
(Hadis Riwayat Muslim)

Gold Zakat Infographic

Gold & Silver Zakat Calculations Method:

Women’s Jewelry Gold ( اَلْحُلِّى )

The gold used for female body jewelry, hardware or furniture whether used occasionally or continuously. Women’s gold jewelry is obligatory when the amount of weight exceeds’ uruf (custom). The gold uruf rate in Selangor is 800 grams (current uruf rate).

Example:
(Weight of gold – Uruf) x current gold price x 2.5%]
(900 grams – 800 grams) x RM144.38 = RM14,438 x 2.5% = RM360.95

Non-Jewelry Gold ( غَيْرُالحُلِّى )

The gold that is owned and not for jewelry purposes either in the form of currency, ingot, wrought, jewelry and the like.

It is charged 2.5% of the total amount if the rate of ownership is equal or exceeds its nisab of 85 grams. It is not the same as gold jewelry. The unused gold nikel is 85 grams.

Example:
Gold scale x current price x 2.5% = Zakat amount
100 grams x RM144.38 = RM14,438 x 2.5% = RM360.95

Pawn Gold

The gold that is pawned is the perfect possession and obliged to be liable after deducting the value of the loan and the salaries.

Example:
[(Current gold weight x current price) – Loan Value – Save Wage] x 2.5% = Zakat amount
[(200 grams x RM144.38 = RM28,876) – RM10,000 – RM76] x 2.5% = RM470

Silver

For silver metal, whether used as jewelry or not (stored as jewelry at home), then the calculation is based on the value of the silverware. Nisab for silver is 595 grams or more

Example:
600 grams of silver x RM2.45 (segram on 30 April 2014) x 2.5% = RM36.75

Non-Physical Gold Investment That Not Syariah Compliant

Non-physical gold investment that not syariah compliant (assessed zakat savings)

This investment uses the current gold price as an investment reserve because the institution actually does not have physical gold.

Law

Such investment law is invalid and illegal. It is included in the sale and purchase category of something that does not exist physically and also sells something that is not owned by the party who sells it. The act is falsehood because of insufficient terms of the agreement entered from the perspective of the transaction and the subject matter of the contract.

All profits earned from this investment are illegal. So it is not obligatory to be tolerated. However, the capital or investment tree is a lawful property. Therefore, if it exceeds Nisab, then zakah is obliged to issue 2.5% of the total capital.

Whereas in the case of Akad Fasid because of the inadequacy of the legitimacy of the sale and purchase, but ending with the process of qabd (transfer), it is obligatory to zakat on it because its ownership status is perfect. It is obligatory zakat (on both principals and profits) for fakid transactions but accompanied by qabd.

Zakah on Shariah Non-compliant Gold Investments Status

Type of AkadDescriptionOwnership StatusZakat Status
Akad BatilInadequate contract is the terms of the agreement termed from the perspective of the transaction and the subject matter of the contractInvalidNot Requiredb
Fasid Acceptance without QabdInadequate contract is a legitimate legal sale and does not end with qabdInvalidNot Required
Fasid and Qabd ActInadequate contract is a legitimate legal sale, but ends with qabdValidRequired

Gold and Silver Zakat

Gold and Silver Zakat