Is Zakah Applicable on Gold in Use?
Question

I would like to request you to explain to me and my brothers about the matter of Zakah on gold or gold and silver jewellery that is intended for use, not for buying and selling. Some people say that there is no Zakah on gold that is intended for wearing, and others say that there is Zakah on all gold, whether it is for use or for trading, and that the Hadiths which say that there is Zakah on gold that is intended for use are stronger than the Hadiths which say that there is no Zakah on it. I hope that you will answer this query.
Praise be to Allah.The scholars agreed that Zakah is obligatory on gold and silver jewellery if it is a kind of adornment that it is prohibited to use, or if it is prepared for trading etc. But if it is a permissible kind of jewellery that is intended to be used or loaned, such as a silver ring or women’s jewellery , or things that it is permitted to use to adorn weapons, then there is a difference of scholarly opinion as to whether Zakah is obligatory on these things. 
Some scholars say that Zakah is obligatory on them because they are included in the general meaning of the verse (interpretation of the meaning):
“And those who hoard up gold and silver (Al-Kanz: the money, the Zakah of which has not been paid) and spend them not in the way of Allah, announce unto them a painful torment.” [At-Tawbah 9:34]
Al-Qurtubi (may Allah have mercy on him) said, in his Tafsir of this verse: “Ibn `Umar explained the meaning of this in Sahih Al-Bukhari, when a Bedouin said to him, `Tell me about the verse (interpretation of the meaning), “And those who hoard up gold and silver.”’ Ibn `Umar said: `(It means) the one who stockpiles them and does not pay Zakah on them – woe to him. This was before (the order to pay) Zakah on them was revealed, and when it was revealed, Allah made it a means of purification of wealth.’” (Narrated by Al-Bukhari, 2/111, Ta`liqan; 5/204, also Ta`liqan. Ibn Majah, 1/569-570, no. 1787 and Al-Bayhaqi, 4/82)
Other Hadiths also imply this, such as the Hadith narrated by Abu Dawud, An-Nasa’i and At-Tirmidhi from `Amr ibn Shu`ayb from his father from his grandfather, (who said) that a woman came to the Prophet (peace and blessings of Allah be upon him) with her daughter, on whose hands were two heavy bracelets of gold. He said to her, “Do you pay Zakah on these?” She said, “No.” He said, “Would you like Allah to replace them for you with bracelets of fire on the Day of Resurrection?” So she took them off and gave them to the Prophet (peace and blessings of Allah be upon him) and said, ‘These are for Allah and His Messenger.’” (Narrated by Ahmad, 2/178, 204, 208; Abu Dawud, 2/212, no. 1563; At-Tirmidhi, 3/29-30, no. 637; An-Nasa’i, 5/38, no. 2479, 2480; Ad-Daraqutni, 2/112; Ibn Abu Shaybah, 3/153; Abu `Ubayd in Al-Amwal, p. 537, no. 1260 (Harras edn.); Al-Bayhaqi, 4/140)
 It was narrated by Abu Dawud in his Sunan, Al-Hakim in Al-Mustadrak and Ad-Daraqutni and Al-Bayhaqi in their Sunans that `Aishah (may Allah be pleased with her) said: “The Messenger of Allah (peace and blessings of Allah be upon him) entered upon me and saw on my hands rings of silver. He said, `What is this, O `Aishah?’ I said, `I had them made so that I could adorn myself for you, O Messenger of Allah.’ He said, `Do you pay Zakah on them?’ I said, `No’ or `Whatever Allah wills.’ He said, `This would be enough to take you to Hell.’” (Narrated by Abu Dawud, 2/213, no. 1565 – this version was narrated by him; Ad-Daraqutni, 2/105, 106; Al-Hakim, 1/389-390; Al-Bayhaqi, 4/139)
 It was narrated that Umm Salamah (may Allah be pleased with her) said: “I used to wear jewellery of gold, and I said, `O Messenger of Allah, is this Kanz (money, the Zakah of which has not been paid, cf. At-Tawbah 9:34)?’ He said, `Whatever reaches the amount at which Zakah is obligatory, then pay the Zakah. Then it will not be Kanz.’” (Narrated by Abu Dawud, 2/212-213, no. 1564; Ad-Daraqutni, 2/105; Al-Hakim, 1/390; Al-Bayhaqi, 4/83, 140)
 Some scholars said that there was no Zakah to be paid on it, because by using it in a permissible manner, it becomes like clothing and other items, and is not like a product that has a commercial value. They responded to the general meaning of the verse [At-Tawbah 9:34] by pointing out that the practice of the Companions excluded gold that was used for adornment. 
It was reported with an authentic Isnad (chain of narration) that `Aishah (may Allah be pleased with her) used to look after her brother’s orphaned daughters in her apartment. They had gold jewellery but she did not pay Zakah on it . Ad-Daraqutni narrated with his Isnad from Asma’ bint Abu Bakr (may Allah be pleased with her) that she used to adorn her daughters with gold jewellery, and she did not pay Zakah on it, (although its value was) nearly fifty thousand. (Sunan Ad-Daraqutni, 2/109)
 Abu `Ubayd (may Allah have mercy on him) said in his book Al-Amwal: “Isma`il ibn Ibrahim told us, from Ayyub, from Nafi’, from Ibn `Umar, that he would marry one of his daughters off for ten thousand (as Mahr), of which he would make her jewellery four thousand, and they did not pay Zakah on that.” (A similar report was narrated by Ad-Daraqutni, 2/109; Abu `Ubayd in Al-Amwal, p. 540, no. 1276 (Harras edn.); Al-Bayhaqi, 4/138)
 He said: “Isma`il ibn Ibrahim told us, from Ayyub, from `Amr ibn Dinar, who said: `Jabir ibn `Abdullah was asked, “Is there any Zakah on jewellery?” He said, “No.” He was asked, `What if it reaches (the amount of) ten thousand?” He said, “That is a lot.”’” (Narrated by Ash-Shafi`i in Al-Musnad (edited by As-Sindi), 1/228, no. 629; Al-Umm, 2/41; also narrated by Abu `Ubayd in Al-Amwal, p. 540, no. 1275 (Harras edn.); Al-Bayhaqi, 4/138)
 The more correct of these two views is the view that Zakah on jewellery is obligatory , if it reaches the Nisab (amount of wealth at which Zakah becomes obligatory), or if the owner possesses enough gold , silver and trade goods to complete the Nisab – because of the general meaning of the Hadiths which state that Zakah is obligatory on gold and silver. 
There is no authentic Hadith which excludes it (jewellery) as far as we know. The Hadiths of `Abdullah ibn `Amr ibn Al-`Aas, `Aishah and Umm Salamah quoted above mention this, and these are good Hadiths with no valid criticism concerning their Isnads, so we should act upon them. Although At-Tirmidhi and Ibn Hazm (may Allah have mercy on them) regarded them as inauthentic, there is no solid evidence for this, as far as we know. We should note that At-Tirmidhi (may Allah have mercy on him) may be excused for what he said, because he quoted the Hadith of `Abdullah ibn `Amr with an inauthentic Isnad, but it was narrated by Abu Dawud, An-Nasa’i and Ibn Majah with a different, authentic, Isnad, which At-Tirmidhi probably did not discover.
And Allah is the source of strength. May Allah bless our Prophet Muhammad and his family and companions, and grant them peace.
And Allah knows best.