Short Answer

If jewelry or household decorations are primarily for personal use with no intention of investment or financial security, then you don’t need to pay Zakah on it. However, if it they are considered to be an investment or financial security then Zakah must be paid.

Detailed Explanation

Gold and silver have historically been the medium of trade throughout most of the world, but are now mainly purchased for investment and are not mediums of exchange anymore. Therefore, Zakāh is due on them if they are possessed in the form of nuggets, bars, or coins since they are not kept for personal use in these forms. However, if one owns gold or silver primarily for personal use with no intention of investment, such as gold jewelry or decorations around the house, then Zakāh is not due on them.

Imām Abū Ḥanīfah and his students said that gold and silver are zakatable in any form, whether it be as jewelry or decorations, because they were the medium of exchange. See Lb 145; Kh 144. Al-Mawṣilī argued that productive wealth is either set by Allah or set by created beings. He claimed that “gold and silver were created, in their essence, as a currency for things, so there is no need to utilize them [in order for productivity to exist]” and “productivity may be set by people…through the intent of trade, so increase is apparent or probable.” See Kh 146. I have taken the opinion of Imam Shāfiʿī and Imam Mālik because the function of gold and silver has been changed today.

[Shaykh] Mustafa Umar

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