Currency is subject to zakat because it can be used for transactions just like gold and silver. Money, whether in the form of paper, coins, or other types, is considered equivalent to gold and silver as a medium of purchasing power.
The zakat threshold (nisab) for gold is based on the current value of 20 mithqal (85 grams) of gold or 595 grams of silver. The majority of Islamic jurists (jumhur fuqaha) have linked the nisab of money to the nisab of gold (85 grams).
Quranic Evidence:
وَٱلَّذِينَ يَكْنِزُونَ ٱلذَّهَبَ وَٱلْفِضَّةَ وَلَا يُنفِقُونَهَا فِى سَبِيلِ ٱللَّهِ فَبَشِّرْهُم بِعَذَابٍ أَلِيمٍۢ ٣٤
“And (remember) those who hoard gold and silver and do not spend it in the way of Allah, announce to them a painful punishment.”
(Surah At-Taubah: Verse 34)
Prophetic Hadith:
Saidina Ali narrated that Prophet Muhammad ﷺ said:
“When you have 200 dirhams and one full year (haul) has passed, zakat of 5 dirhams is obligatory. Zakat on gold is not obligatory unless you have 20 dinars (one of the currencies used in Arabia at that time). When you have 20 dinars and a full year has passed, zakat of half a dinar is obligatory. Likewise, the same proportion applies if the value increases, and zakat is not obligatory except after a full year.”
(Hadith narrated by Abu Daud)
The Prophet ﷺ also said:
“Every owner of gold and silver who does not pay its due, on the Day of Judgment it will be made into plates and burned in the fire of Hell, then used to scour their sides and backs; each time the plates cool, they will be burned again, a punishment equivalent to fifty thousand (50,000) years, until judgment is passed among the servants of Allah to see whether they go to Paradise or Hell.”
(Hadith narrated by Muslim)
For silver, whether used as jewelry or stored at home, zakat is calculated based on the value of the silver. The nisab for silver is 595 grams or more.
Example:
600 grams of silver x RM2.45(per gram as of 30 April 2014) x 2.5% = RM36.75
Zakat Selangor Hotline : 1-300-88-4343
Email : maklumbalasaduan@zakatselangor.com.my
