Zakat on gold, silver and savings

The two currencies subject by consensus

Gold and silver are zakatable by consensus of every age (Ibn al-Mundhir): hoarded, coined or melted. The Quranic threat targets « those who hoard gold and silver and do not spend it in the path of Allah » (Surah at-Tawba, 34, 35), and the hadith of Abu Hurayra describes the punishment of one who fails to pay their due (Muslim 987). Money savings, on whatever medium, follow the same regime from the threshold of twenty dinars or two hundred dirhams, with a quarter of the tenth each year.

Worn jewellery: two schools

First view, that of the majority: Malikis, Shafiites in the reliable position, Hanbalis, reported from Jabir, Ibn Umar, Anas, Aisha and Asma: a woman owes nothing on her lawful jewellery that she wears or lends, for zakatable wealth is what grows or is prepared for growth, and adornment has left growth through use. Ibn Umar adorned his daughters and paid nothing; Aisha did not pay zakat on her jewellery and ruled the same for her orphan nieces.

Second view: Hanafis, one Shafii and Hanbali position: zakat is due on lawful jewellery that reaches the threshold, worn or stored. The proofs: « O women, give charity, even from your jewellery » (al-Bukhari 1466, Muslim 1000), the report of Ibn Masud in Abd al-Razzaq, and the hadith of the woman with two heavy gold bracelets whom the Prophet asked: « Have you paid the zakat on these? Pay it, otherwise you would be more exposed to having two bracelets of fire made for you on the Day of Resurrection » (Abu Dawud 4289, at-Tirmidhi 637, good hadith).

The Messenger of Allah entered upon me and saw silver rings on my hand. He said: « What is this, Aisha? » I said: « I made them to adorn myself for you, Messenger of Allah. » He said: « Do you pay their zakat? » I said: « No, or as Allah wills. » He said: « That would be enough for you against the Fire. »Abu Dawud 1565, ad-Daraqutni, al-Bayhaqi

Unlawful use of gold and silver

Vessels of gold and silver and every unlawful use of these metals bear zakat by consensus of the Muslims, as reported by an-Nawawi: lawful use of the metal is where the debate lies, not the forbidden use.

Other precious materials

an-Nawawi rules: no zakat on gems, rubies, turquoises, pearls, coral, emeralds, nor on iron, copper or glass however precious, nor on musk and amber, unless destined for trade; this is the view of most of the early generations. Another position of Ahmad requires zakat if their value reaches the threshold. Several scholars, among them al-Hasan, Umar ibn Abd al-Aziz, al-Zuhri and Abu Yusuf, imposed the fifth on ambergris, and Abdullah ibn al-Hasan on everything drawn from the sea except fish.

Practical note

What separates the two schools on jewellery is actual use: worn for lawful adornment, jewellery falls outside zakat for the majority; stored as a reserve of value, it rejoins savings and becomes zakatable by all. The rule for savings remains that of the two currencies: threshold, year and 2.5 per cent.