Introduction

The Zakat is one of the five pillars of Islam, and for those who are eligible, it is a religious obligation to give a portion of wealth to those in need. Among the types of wealth that require zakat, gold is one of the most common.

In this guide, we wil learn step by step about how to calculate zakat on gold.

What Is Zakat?

Zakat is an annual charitable payment required from Muslims who meet certain wealth thresholds (known as nisab). It is nothing but it is about purifiing the wealth by re-distributing a portion to the poor and needy, fostering community support and reducing inequality.

Who has to pay Zakat on Gold?

Suppose, If you own gold that meets or exceeds the nisab threshold, and one lunar year has passed since you owned it, then you are required to pay zakat on it.

What is the Nisab for Gold?

The nisab for gold is 87.48 grams (or 7.5 tolas). If you possess this amount or more for one lunar year, zakat becomes obligatory on it.

How Much Zakat Is Due on Gold?

Zakat on gold is calculated at 2.5% of the total value of the gold owned.

Step-by-Step on How to Calculate Zakat on Gold

Step 1: Weigh Your Gold

Determine the total weight of all the gold you own. This includes jewelry, coins, or bars – whether you wear it regularly or not.

Step 2: Check the Current Market Rate

Look up the current market price of gold per gram (or per tola, depending on your local system).

Step 3: Calculate the Total Value

Multiply the weight of your gold by the current market rate to get the total value in your local currency.

Example:
You own 100 grams of gold.
Gold price per gram is ₹6,500.
Total value = 100 x 6,500 = ₹6,50,000

Step 4: Calculate 2.5% of the Total Value

Zakat = Total value x 2.5%
In the above example:
Zakat = ₹6,50,000 x 0.025 = ₹16,250

This ₹16,250 is the zakat you owe.

What If Gold Is Mixed With Other Metals?

If your jewelry is not pure gold (e.g., 22K or 18K), you can estimate the gold content or have a jeweler to help you to identify the pure gold weight. Zakat is calculated only on the gold portion.

Do You Need to Pay Zakat on Gold You Wear?

The Answer is Yes. Because the majority of scholars usually agrees that zakat has to be paid on all gold, regardless of how often it is worn or stored. However, there are differing opinions among schools of thought, so consult your local scholar if unsure.

Where Should You Pay Your Zakat?

Zakat should be given to those eligible under Islamic guidelines – the poor, the needy, or trusted Islamic charities that distribute zakat on your behalf.

Final Thoughts

Understanding about how to calculate zakat on gold is crucial for every Muslim who owns gold. With a simple 2.5% calculation, you fulfill a spiritual duty while making a meaningful impact on others’ lives. Always double-check the current gold prices and seek guidance from a local scholar for specific questions.