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As a monetary metal or as an investment asset, silver has an important role throughout its history. For thousands of years, silver has been used as coin for trade and business. Many ancient economies used it as coin as a medium of exchange. Similar to gold it also retains its intrinsic value and is considered as a store of value. Silver also used to preserve wealth similar to gold although its price is more volatile. It is perfect metal for investors due to its price fluctuation. It is traded in the market in liquid form but can also be traded in other forms such as bullion coins and exchange trade funds etc. Besides its role as metal, silver also used in electronics largely due to its high conductivity. This makes it dynamic both for investment assets and industrial commodities.
Being a financial asset, silver is considered as zakatable if it exceeds nisab value. The nisab for silver is approximately 612.36 grams. Whether it is in the form of coins or any other form, when it exceeds this amount, it is liable to pay zakat subject to possession of full Islamic lunar year. The rate of zakat on silver is also 2.5% as on the other zakatable assets. This means you have to pay 2.5% of its market value if it exceeds nisab.
Example:
Suppose you own 1,000 grams of silver and the current market price is $0.80 per gram.
Total value of silver: 1,000 grams × $0.80 = $800
If this value is above the nisab threshold such as 612.36 grams, you would calculate 2.5% on $800:
Silver Used as Jewelry:
There are different opinions as some scholars think that silver in the form of jewelry used for personal adornment is exempted from zakat but some scholars consider it as a zakatable asset whatever its form exceeds nisab. You should contact your school of thought for clarity in this regard.
The payment of zakat on silver, is also for the purpose to purify the remaining wealth and contribute to social welfare by redistributing resources among the needy.
Every assets that comes into accumulation of wealth is subject to zakat in Islam. Silver also comes under the category of valuable assets of wealth, hence, it is also subject to zakat. It is reliable indicator of wealth have intrinsic value and used as exchange coin. It store and accumulate wealth over time. Like gold, it is also not perishable and retains or appreciate its value. It contribute to overall wealth of a person whether it is in the form of bullions, coins or any other form. Due to these reasons being a valuable asset and source of accumulation of wealth, it is liable to pay zakat on silver.
The nisab is determined using silver and gold due to its historical, economic, and social importance.
When Islam came, silver was used for daily transactions and exchange currency at that time and was natural benchmark for measuring wealth.
Silver has a far lower per gram value compared to gold. Nisab based on silver makes it accessible to most needy people. This approach ensures that the obligation of zakat expanded among the society which is its purpose of wealth redistribution.
The nisab based on silver is more inclusive. A lower threshold means that even having lower wealth are reminded of their responsibility to help others, which reinforces the social justice in the light of true essence of zakat.
Silver being a zakatable asset requires calculation to count due zakat. Manual calculation can be prone to errors as many people do not know the actual formulas and zakat rules to find the actual figure. Finding online sources may lead to misinformation until its authentication proved. You may also acquire services of scholars to calculate zakat. To get rid of all these obstacles of manual calculations you need robust and accurate calculator.
To resolve this issue, we have designed this zakat on silver calculator to calculate zakat due accurately based on authentic formulas. This is developed with the help of Islamic Scholars and Islamic books.
When it comes to the features of our calculator for calculating zakat on silver, it offers user friendly and intuitive interface. The main feature if this calculator is that it fetches and uses live silver and currency rates. User don't need to enter values of the current silver rates or currency rates. A user have to select currency and enter silver in grams. All the other calculations are made by calculator based on formulas working at the backend. The user interface is simple and easy to use. A user can understand what to do on first sight. The calculations are robust accurate and efficient without any delay. No registration or subscription is required to use this calculator. It is free and online and a person sitting anywhere in the world can use this without any obstacle. It performs accurate calculation and gives required results instantly.
To understand how the calculator works you first need to know about its interface and layout.
At the top there is a display that shows current silver rate and currency rate. Base currency is USD. The selected currency rate is displayed with respect to USD. Below this display, there is a drop-down option which contains all the currencies of the world. A user can select desired currency and it displays its current rates in the above display section. Silver rate also displays in selected currency.
Below the currency option, there are two textfields. One for entering silver in grams and other for entering liabilities like loan, debts, mortgage etc. At the bottom, teo buttons are available. One for performing calculations and other for clearing textfields.
Just select your required currency, enter silver weight in grams, enter loan etc (if any) and hit the calculate button to get results. Results are displayed instantly. A graph is also displayed in results section to better understand the results calculated.