Ruling on selling gem-studded gold jewelry

My question is regarding the zakat on gold ornaments. I am aware of its calculations etc but I want to clarify whether zakat is due on stone ornaments - both on ornaments that have precious stones like pearls, diamonds, coral etc or on imitation stones like the American diamond, imitation pearls etc. When we go to the jeweller to sell our old ornaments (that have fake stones), they usually discard the stones and then weigh them to get the weight of the gold. However when we buy stone ornaments (with fake stones), we have to pay their price in gold (we pay for the weight of the entire ornament and not just the gold part). So when the stones obviously don't have any value except decorative, are we required to pay the Zakat for them? Please clarify, in both cases.

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and messenger. {C}

The scholars differed in opinion about the jewelry of gold and silver which are prepared for use (to be worn as adornment) whether or not Zakah is due on it. The majority of the scholars are of the view that Zakah is not obligatory for it, and this is the view we adopt here in Islamweb. However, some jurists are of the view that Zakah is due on it and this is more cautious in order to be on the safe side. We have explained this in Fataawa 82925 and 87362; so please refer to them.

As regards jewelry made of materials other than gold and silver like pearls, diamonds and so on, whether they are original or artificial, then Zakah is not due on them unless they are set aside for trade. Whatever is set aside for trade thereof should be assessed, and Zakah is due on it if it reaches the Nisaab (minimum amount liable to Zakah payment) and a whole lunar year has elapsed while they are in the possession of the owner. But those of them which are for use or are saved, then there is no Zakah on them. For more information, please refer to Fatwa 85625.

Moreover, Zakah is not obligatory for gold unless it reaches the Nisaab and a whole lunar year elapses when it is in the owner's possession. The Nisaab for gold is what is equal to approximately 85 grams of pure gold, which is known as 24 carat gold. The impure gold is the plated gold, which is mixed with metals other than gold as defined by the scholars.

The preponderant view is that Zakah is obligatory on pure gold only. So the amount of gold that is in the gold bar is calculated and if it reaches the Nisaab, then it is obligatory to pay Zakah on it. Other metals or lobes that are added to gold are not calculated with it, as Zakah is not obligatory for them.

The Fiqh Encyclopedia highlighted the views of the scholars on the gold that is mixed with other metals as follows: "The scholars differed in opinion regarding the obligation of Zakah on gold that is plated (mixed). The Shaafi‘i and Hanbali schools are of the view that Zakah is not obligatory on plated gold or silver unless the amount of pure gold or silver in it reaches the Nisaab. If the pure gold or pure silver reaches the Nisaab, then Zakah is to be paid on this pure gold or pure silver only. It is also possible that one pays Zakah on plated gold or silver according to the amount of pure gold or pure silver which he believes is included therein, while taking into consideration the degree of quality.

The Hanafi School said: If the coined item is mostly silver, then it takes the ruling of the current coind silver, so Zakah is obligatory for it as if it is entirely silver, and Zakah is not paid on it as tradable items, but if the coined item is mostly plated, then it does not take the ruling of coined silver but rather the ruling of tradable items. So there is no Zakah due on it unless the person intends to trade it and its value reaches the Nisaab.

The Maaliki School said: if the plated gold Dinaars and silver Dirhams are commonly used exactly like the unmixed ones [i.e. the pure gold Dinaars and the pure silver Dirhams], then it is treated as the pure ones; so Zakah is paid on it if its weight along with the plated gold or silver included in it reaches the Nisaab; otherwise, if it is not commonly used like the unmixed ones, then the pure gold or silver is calculated and if it reaches the Nisaab, Zakah is paid on it; otherwise, it is not.

Ash-Shawkaani said in As-Sayl Al-Jarraar: "His saying: 'The gold and silver that are not plated' is correct, because the other metals that are mixed with gold and silver are not liable to Zakah and Zakah is not obligatory for it. So only the pure gold and pure silver should be estimated with the added materials excluded. This is whether the gold and silver are of good or poor quality."” [End of quote]

There is nothing wrong with buying gold studded with metal and gems while estimating the value of such metals or gems and calculating in the same value of gold as long as the price is money – i.e. the process does not involve exchanging gold for gold. But when selling the items to the jeweler, then he may accept to calculate the value of the gems and he may not. If the owner of the gold agrees to sell, then it is permissible for him to do so, otherwise he is not obliged to sell it. He may sell it with the price that he likes only as this is trade, and what is important in it is that both parties - buyer and seller - consent to it.

Allaah Knows best.