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How exactly do you work out how much zakat you have to give on the gold you own?

I understand that you work out the nisab value, and if you have more gold than that, you give 2.5% of the value of the gold you have. I am assuming that is based on the nisab value of 24 carat gold.

However, most people have gold jewellery, and gold jewellery is normally 22 carat gold, as 24 carat gold is too soft to make into jewellery.

So how does it work?

Am I supposed to find the nisab of 22 carat gold, then give zakat based on how much 22 carat gold I have based on the current value of 22 carat gold on the open market?

Or, to make things even more complicated, is it based on the value of the jewellery? which normally costs a 3rd more than the value of the gold, when when it comes to selling your jewellery, I think the gold merchant is just interested in the value of the gold, so you normally get a 3rd to a half off the value you the jewellery... as I think they melt the jewellery to get pure gold out of it...

So I have no idea how this works when working out zakat.

As ramadhan is approaching, apparently a lot of people like to give their zakat in ramadhan.

  • I attempted to cover it in my answer, but I feel the melt-value vs market-value part of the question would be better posted separately. – goldPseudo Jun 13 '13 at 16:35
  • Why don't you get it's market value and pay zakat on that? – goto Jun 15 '13 at 4:00
  • @goto, I thought you pay zakat on pure gold, not on jewellery? So you're supposed to work out how much pure gold you have in your jewellery? – oshirowanen Jun 16 '13 at 12:47
  • Gold as well as precious stones are under zakat. In Prophets Muhammad's (PBUH) times, a part of actual thing was taken as zakat and if the same thing was done for diamonds, cutting them would have devalued them, so they were exempted. Nowadays you can calculate the price a give it as money. – goto Jun 16 '13 at 23:28
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To my understanding, the general rule according to the Hanafi madh'hab is that gold mixed with a valueless metal is still considered "gold" for all intents and purposes so long as it contains more gold than it does other metals. So anything higher than 12 karats of gold (which is twelve parts gold to twelve parts other material) would still be treated the same as if it was full 24 karat gold for the purposes of zakat.

If the jewelry is for personal use and was not acquired with the intent to sell or trade it, then the zakat payable would merely be based on the weight of gold, not the market price. I believe that the Hanafi position is that it would still be based on weight even if it was acquired for trade, but I'm not certain: I know that zakat on non-gold/non-silver jewelry is only payable on trade goods (at market value) and not for personal-use items, but given that one should pay zakat on gold/silver regardless I believe that it is calculated the same way in either case.

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According to the mufti's on http://www.sunniforum.com/forum/showthread.php?44306-Zakat-on-Gold-and-Gold-Jewellery&p=369856&viewfull=1#post369856, it seems that 22k gold should be valued back on 22k gold and 24k gold should be valued at 24k gold, i.e. 22k gold should not be valued at the same rate as 24k gold when it comes to giving zakat.

This seems to be the sunni view.

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