The record jump in gold prices in the global market has brought major changes to the calculation of zakat this Ramadan, confronting zakat payers with a new reality.

An analysis by Qatar-based media outlet Al Jazeera found that the price of gold has nearly doubled in the past year. As a result, the ‘nisab’, or wealth threshold for making Zakat obligatory, has also increased significantly.

Zakat is one of the main pillars of Islam. It is an obligatory donation aimed at the sanctification of wealth and the establishment of social equality. Although Zakat can be paid at any time of the year, most Muslims choose the month of Ramadan in the hope of greater reward.

New equation for gold price and nisab
According to Al Jazeera’s report, the price of gold per troy ounce in the international market last Ramadan was around $2,900, which has now exceeded $5,100. This high price of gold has two direct effects on zakat payers.

First, the minimum wealth threshold, or nisab, for which zakat is obligatory has increased significantly. At the current market price of 85 grams (7.5 tola) of gold, the nisab stands at about $15,000. In Bangladeshi currency, this is equivalent to about 1.8 million taka. Last year, this nisab was below $8,000. As a result, many of those who paid zakat last year may be exempt from the zakat due to being below the nisab this time.

Secondly, the amount of Zakat payable by those who have gold in their possession has also increased according to the current market price.

Zakat vs. Sadaqah
Zakat is an obligatory act of worship. It is paid once a year at the rate of 2.5 percent (1/40th) of the Nisab amount of wealth. Sadaqah, on the other hand, is a voluntary donation. It can be given at any time and in any amount.

Rules for calculating zakat on gold
Zakat is calculated based on the current market price of gold, not the price at the time of purchase. For ease of calculation, it is important to keep the following criteria in mind:

1 troy ounce = 31.1035 grams.
At $5,100 per troy ounce, 1 gram of pure gold is worth about $164.
The purity of gold is determined by ‘karat’. For example, 18 karat means it contains 75 percent pure gold.
Simple calculation formula
1. Pure weight (24 carats): (Total gold weight × carats) ÷ 24
2. Market price: Pure weight (grams) × $164 (price per gram)
3. Zakat payable: Total market price × 2.5%

Example : If someone has an 18-carat ornament weighing 40 grams, its pure gold weight would be 30 grams. At the current market price, its value would be approximately $4,920. If this is someone’s only savings, then he will not be subject to Zakat as he has not fulfilled the Nisab ($15,000).

Zakatable assets and recipients
Zakat is not limited to cash or gold. It also applies to savings, business products, investments, agricultural products, and livestock. However, Zakat is not applicable to personal vehicles, homes, or necessary clothing and furniture.

According to the Holy Quran, the eight categories of people who are eligible for Zakat include the poor, the indebted, and the traveler. However, Zakat cannot be given to family members who are responsible for the maintenance of the Zakat giver (such as parents, children, or spouse).

According to experts, paying zakat through proper calculation and awareness is not only an act of worship, but can also play an effective role in reducing economic inequality in society.