Nisab of Zakat, is currency note equivalent to Gold or Silver?

 

Nisab of Zakat, is currency note equivalent to Gold or Silver? 

﷽

 إِنَّ الْحَمْدَ لِلَّهِ نَحْمَدُهُ وَنَسْتَعِينُهُ مَنْ يَهْدِهِ اللَّهُ فَلاَ مُضِلَّ لَهُ وَمَنْ يُضْلِلِ اللَّهُ فَلاَ هَادِيَ  إِنَّ أَصْدَقَ الْحَدِيثِ كِتَابُ اللَّهِ وَأَحْسَنَ الْهَدْىِ هَدْىُ مُحَمَّدٍ وَشَرَّ الأُمُورِ مُحْدَثَاتُهَا وَكُلَّ مُحْدَثَةٍ بِدْعَةٌ وَكُلَّ بِدْعَةٍ ضَلاَلَةٌ وَكُلَّ ضَلاَلَةٍ فِي النَّارِ وَأَشْهَدُ أَنْ لاَ إِلَهَ إِلاَّ اللَّهُ وَحْدَهُ لاَ شَرِيكَ لَهُ وَأَشْهَدُ أَنَّ مُحَمَّدًا عَبْدُهُ وَرَسُولُهُ أَمَّا بَعْدُ 

Praise be to Allah, we seek His help. Whomsoever Allah guides will never be led astray, and whomsoever Allah leaves astray, no one can guide. The truest of word is the Book of Allah and best of guidance is the guidance of Muhammad. The worst of things are those that are newly invented; every newly-invented thing is an innovation and every innovation is going astray, and every going astray is in the Fire. I bear witness that there is none worthy of worship but Allah (alone with no partners) and I bear witness that Muhammad is His slave and Messenger. To proceed

(this is how Prophet SAW used to start his speech Nisai 3278, Nisai 1578)

رَبِّ اشْرَحْ لِي صَدْرِي ‎﴿٢٥﴾‏ وَيَسِّرْ لِي أَمْرِي ‎﴿٢٦﴾‏ وَاحْلُلْ عُقْدَةً مِّن لِّسَانِي ‎﴿٢٧﴾‏ يَفْقَهُوا قَوْلِي ‎﴿٢٨﴾(Taha)

My Lord, open up my heart [with assurance] And ease for me my task And untie the knot from my tongue That they may understand my speech.[20:25-28] Ameen

 اللَّهُمَّ صَلِّ عَلَى مُحَمَّدٍ وَعَلَى آلِ مُحَمَّدٍ

O Allah, send salah upon Muhammad and upon the family of Muhammad (Nasai 1292)

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Zakat is a huge topic, I will be focusing only on one aspect and will keep it brief. Nisab of Zakat on currency notes. What is Nisab? Nisab, in simple word means the threshold amount after which you are supposed to pay Zakat. What is a currency note? State bank offers you currency note and on it's back there is gold stored in it's reserve, well not anymore, but theoretically speaking that's the concept behind currency notes. If you were to go to bank and give them the currency note, they are supposed to provide you gold equivalent to that currency note.

Now moving forward, when you are going to calculate Zakat particularly only for currency note, the Nisab of it would be Gold not Silver, why?! because currency note is backed by Gold not Silver.

So, the nisab (according to this site) of 

Gold is 7.5 tola (87.48 g) = PKR 2,250,000

and of 

Silver is 52.5 tola (612.36 g) = PKR 175,000

At the time of Prophet, there were no currency notes, gold and silver were used as currencies and 7.5 tola Gold was equal to 52.5 tola Silver. 

7.5 Tola Gold  =  52.5 Tola Silver

Which is not the case now, as you can see above the price difference. Silver is no longer used as currency, it is obsolete, unless someone has jewelry of silver then they have to give zakat for that jewelry, I will touch this part at the end. I am only focusing on currency note for now. 

So, if you take Gold as Nisab for currency note (which you should according to the logic presented above), then if you have savings of PKR 2,250,000 and above, a year has passed on it, only then you are eligible to pay 2.5% of that money.

If you take Silver as Nisab for currency note, then if you have savings of PKR 175,000 and above, then you are eligible to pay zakat on currency note which is based on gold but you are basing it on silver 😅.

 

To understand this argument, one needs to have basic knowledge of what currencies are and how financing works, a simple Molvi of a masjid or even a Mufti with no such background knowledge cannot understand and will give fatwa according to his jurisprudence which was set when Gold and Silver were separate currencies.

Aside from this logical explanation, let me give you a reference from Hadith as well to support my argument.

Narrated Abu Sa`id Al-Khudri:

Allah's Messenger (ﷺ) said, "No Zakat is imposed on less than five Awsuq of dates; no Zakat is imposed on less than five Awaq of silver, and no Zakat is imposed on less than five camels."

Bukhari 1459

So, Prophet S.A.W has given a threshold that the amount being given in Zakat should be no less than these. First let's see what Awsuq is, it is a plural of wasq which is equal to 60 saa.

1 wasq = 60 saa

1 saa = 2.6 kg 

Roughly 1 saa is equal to 3kg to be on the safe side. Now in Pakistan you can get good quality of date of 1kg at around 2000 PKR, in Ramadan it might be costly. 

if we take 

1kg dates = PKR 2000

3kg (1 saa) = PKR 6000

60 saa (1 wasq) = PKR  360,000

5 wasq =  PKR 1,800,000

Now this 5 wasq price of date is it closer to Gold 7.5 Tola price or 52.5 Tola Silver. Gold right?! so the zakat will be based on Gold Nisab. 

Similarly, Prophet S.A.W said no Zakat is imposed on less than 5 camels. What is the price of Camel in Pakistan. I googled and it gave me between 500,000 to 700,000 and small camel around 250,000 to 300,000.

So, as an example let's take 

1 camel = PKR 250,000

5 camels = PKR 1,250,000

This also becomes closer to Gold Nisab. If you use Silver's nisab you can't even buy half of even 1 small camel with that money let alone 5 camels 😅. 

One might say in the hadith silver is also mentioned. Yes, it is mentioned but as a currency the word used in Arabic is خَمْسِ أَوَاقٍ مِنَ الْوَرِقِ صَدَقَةٌ.

Now the next statement is my own statement, even if someone has jewelry of silver that will also be based on gold because currency equivalent to gold was used to buy that silver itself and again silver is no longer used as currency.

So, let's take an example, 

• you have gold around 3 tolas for more than a year.  
• 1 tola Gold  =  PKR 300,000
• 3 tola Gold = PKR 900,000
• you have savings in terms of cash around PKR 200,000 for more than a year.
• Total it becomes PKR 1,100,000

Now according to the above rules, you are not eligible for Zakat but if you ask a molvi/Alim/Mufti who is following Fiqah of that era when Silver and Gold were separate currencies, Illa MaShaaAllah. He will say that as now there are two kinds of savings added which is Gold and currency in cash, so now 52.5 tola silver Nisab will be applied... why?! 🤦‍♂️ on what rule??? both are gold-based entities. Everything in today's world revolve around Cash, you buy gold, silver, bikes, cars and house or land, all using cash. Silver is not involved in any of the process... 

So, in short, Nisab of Zakat will be calculated based on Gold prices not Silver. This doesn't mean you don't help the poor, it just means you don't make it obligatory on people who are not eligible for it. Secondly, you want to help people give them Sadaqah help them in any way you can why does it have to be Zakaat only??

You can also read my article on Zakat ul Fitr A.K.A Fitrana

سُبْحَانَكَ اللَّهُمَّ وَبِحَمْدِكَ أَشْهَدُ أَنْ لاَ إِلَهَ إِلاَّ أَنْتَ أَسْتَغْفِرُكَ وَأَتُوبُ إِلَيْكَ

Glory is to You, O Allah, and praise, I bear witness that there is none worthy of worship except You, I seek You forgiveness, and I repent to You Tirmidhi 3433

اللهم ارنا الحق حقاً وارزقنا اتباعه وارنا الباطل باطلا وارزقنا اجتنابه

O Allah! Enable us to see the Truth as Truth and give us the ability to follow it. And show us the falsehood as false and give us the ability to refrain from it. Ameen