Zakat is one of the five fundamental pillars of Islam that has to be offered during the Islamic year. Muslims mark one day every year to calculate their Zakat on gold and silver and all of their assets. For many, the commencement of the holy month of Ramadan is the time to give Zakat. But to calculate Zakat, one first must be sure of the Sahib-e-Nisab status. Please note that Zakat is an obligation only on those Muslims who have enough wealth stored in their accounts. Zakat is paid only once the zakat-eligible status is confirmed.
So, Are You Zakat Eligible?
How well do you understand the Nisab and related calculations? The concept of Nisab is based on the trading rate of gold or silver for a specific region’s currency. You are a Sahib-e-
Nisab, and you are eligible to pay Zakat if, and only if, the sum of goods equals to, or exceeds 7.5 tolas ( 3 ounces / 87.48 grams) of gold, or 52.5 / 21 / 612.36 silver grams for one year. We know that gold and silver are not used as a currency today. Hence, it becomes essential to change Nisabinto a local currency. The conversion is based on the current value of gold/silver on the day of estimation.
For the sake of this article, we are going to use Pakistani Rupees as the default currency in our examples to illustrate the Zakat calculation. But all related numbers will change depending on when you determine your Zakat and in which country. For instance, you will have to switch your currency to CAD if you calculate Zakat in Canada.
Gold and silver Nisab calculation formula:
You are calculating your Zakat on the day when the gold standard rate is PKR 96,400 per tola. Then:
PKR 96,400 X 7.5 tola = PKR 723,000
Suppose you use silver to calculate Nisab and assume that the average silver price in Pakistan for that day is PKR 1,456 per tonne. Then:
PKR 1,456 * 52.5 tola = PKR 76,440
Understanding the Example
Let us try to understand the given example in this section. We are calculating Zakat with gold as the standard. Now, as you have more than PKR 723,000 in your savings and assets for the entire year, you are Zakat eligible. But you must pay Zakat on goods and savings for the whole of a year if it reaches PKR 76,440, just if you opt for silver as the Nisab.
The critical point is that the cumulative amount should be above Nisab for a full lunar year. What if your assets fall under PKR 76,440 during a particular month? Your new year will start again only when you are over Nisab again. But if you have Nisab all year, then it is up to you to choose one day in a year to calculate your wealth. Many Muslims prefer the holy month of Ramadan for paying Zakat since rewards of noble deeds are doubled up in the sacred month. However, you can pay Zakat at any time of the year; there is no restriction!
Gold or Silver? Which One Is Better?
Quite a tricky one, this one! We know that the Nisab on the silver is very beneficial for both the recipient and the donor. But there are rules in place, and we must follow them!
- If you have assets and savings only in gold, well, then that is the Nisab you should use.
- But if you have savings and silver or mixed goods, including cash, gold, silver, and other commodities, it is better to use silver as a Nisab option.
Please don’t forget that different religious groups and sects have a difference of opinion on such matters. So if you feel confused at any point, don’t hesitate and ask the questions that keep you awake at night!
How to Calculate Zakat in 2023
Calculating your Zakat becomes relatively easy once you have jotted down all of your assets. All that you have to do is then determine if you are eligible to pay Zakat in 2023. Even though there are many zakat calculators available online, many of these, calculators will not explain how you can calculate Zakat for a specific year, for example, Zakat in 2023.
If you don’t want to calculate your Zakat via a calculator, we will help you understand how you can calculate Zakat for gold and all other zakat-able assets for one year. Let’s do it!
Now the first thing that we want you to remember is that Zakat applies to savings and excess goods for personal use. So your house, clothes, car, electrical appliances, and other things you use every day are not included in the Zakat calculation.
The assets that do make the zakat calculations are as follows:
- Money that you either have at home or in banks.
- Savings for a particular purpose, say buying a new car.
- Gold, silver, or precious pearls.
- Value of shares that you own and which you intend to sell
- Stock profits.
- Money lent that you are expecting to be given back soon.
- Balance sheets are important
- Leased savings
- Market values of properties that you might have purchased recently
Gold Prices in Pakistan
The gold prices in Pakistan are subject to changes daily, so we will refrain from giving you a fixed number.
Online Zakat Calculator by Transparent Hands
Now, if you don’t feel like calculating Zakat on your own, You can also use our online zakat calculator. There are many available online, but the transparent Hands zakat calculator is an excellent choice to consider in this regard. A few very solid reasons behind this recommendation, of this reason, including,
- The calculator features a simple interface
- It is super easy to use
- It is super-fast
- It churns out very reliable figures
- There are no fees for using this calculator
You can use any calculator that you like, no compulsions there!