Did you know that zakat encompasses not only wealth such as money and agricultural produce but also gold? Zakat is one of the five pillars of Islam that requires Muslims to allocate a portion of their wealth.
The zakat collected from financially capable Muslims is then distributed to those in need. While zakat is commonly associated with money and staple food, gold is also subject to zakat.
For those of you who have savings in gold and are financially well-off, here’s a detailed guide for you!
- Understanding Gold Zakat
Just like other forms of wealth, gold is also subject to zakat. Gold zakat is the mandatory almsgiving that a Muslim must pay on gold that has reached the nisab.
The nisab is an indicator of whether a person is required to pay zakat. It is the minimum weight threshold of gold that must be owned for one lunar year, known as haul.
If you have recently acquired gold and have not yet had it for a year, you are exempt from paying gold zakat. However, if you have had your gold savings for a while, check the weight of your gold.
- Nisab: The Determining Factor for Gold Zakat
Nisab is the minimum amount of wealth that must be owned before one is obligated to pay zakat. For gold, the nisab is 85 grams of pure gold.
So, if you are a Muslim with at least 85 grams of pure gold and have held it for one year or more, you are required to pay zakat.
- Amount of Gold Zakat to Be Paid
Although the forms of wealth may differ, the amount of zakat to be paid is consistent. The zakat on gold is 2.5% of the total gold owned.
Total gold includes various types such as gold bars, coins, and even digital gold. All forms of gold are subject to zakat as long as it is pure 24-karat gold.
Thus, if you have 100 grams of pure gold, the zakat to be paid would be 2.5 grams of pure gold. The zakat amount adjusts according to the total gold you own.
- Types of Gold Subject to Zakat
Not all gold is subject to zakat! Only gold that is kept as an investment or savings is liable for zakat.
Gold used as everyday jewelry, as long as worn within reasonable limits, is not subject to zakat. However, some scholars state that gold jewelry is also subject to zakat if it exceeds reasonable limits.
- Timing and Method of Paying Gold Zakat
Gold zakat must be paid once the gold reaches the haul or has been owned for a full lunar year. This aligns with the indicator mentioned earlier.
If you purchase gold during Ramadan this year, zakat will only be due in Ramadan next year, provided it meets the nisab for the minimum weight of gold ownership.
Gold zakat can be paid either in the form of physical gold or in monetary value equivalent to the gold's value. If you choose to pay zakat in cash, adjust it according to the market price at that time.
- Recipients of Gold Zakat
Once paid, gold zakat is distributed to those in need, as zakat aims to help others.
The distribution of gold zakat must adhere to Sharia guidelines, meaning it should be given to the eight categories of recipients, known as asnaf:
- Poor
- Needy
- Zakat administrators
- New Muslims (Muallaf)
- Slaves seeking emancipation (Riqab)
- Debtors (Gharim)
- Those striving in the path of Allah (Fisabilillah)
- Travelers in need (Ibnu Sabil)
- Benefits of Paying Gold Zakat
Zakat is not meant to burden individuals. Besides the purpose of mutual aid, paying zakat is an act of worship with numerous benefits, including:
- Purifying Wealth: Zakat purifies wealth from impurities and makes it more blessed.
- Encouraging Generosity: Paying zakat fosters a habit of sharing and enhances empathy.
- Reducing Social Inequality: Zakat helps reduce social disparities by channeling wealth from financially capable Muslims to those in need.
- Receiving Rewards: Zakat is an act that brings significant rewards and draws one closer to Allah SWT.
Zakat is not merely an obligation but a way to draw closer to Allah SWT and contribute to social welfare.
By understanding the above guidelines, you can perform your gold zakat obligations correctly. To support this, Treasury provides easy and fee-free gold transactions.
You can sell part of your digital gold savings to pay zakat. You can also convert your digital gold savings into physical gold before paying zakat. All of this can be done through your smartphone.
So, what are you waiting for? Pay your gold zakat now to make your investment more blessed and beneficial to others!
