Fiqh-us-Sunnah Volume 3, Zakaat and Fasting, Fiqh 3.016A.
Scholars agree that no zakah has to be paid on diamonds, pearls, sapphires, rubies, corals, chrysolite, or any kind of precious stones unless they are used for trade. There is, however, disagreement over whether women’s gold or silver jewellery is exempt. Abu Hanifah and Ibn Hazm hold that zakah is compulsory on gold and silver jewellery provided they constitute a nisab. Their view is based on the report of ‘Amr ibn Shu’aib from his father from his grandfather: “Two women with gold bracelets on their wrists came to the Prophet, upon whom be peace. The Prophet said: ‘Do you want Allah to make you wear bracelets of fire on the Day of Judgment?’ They answered: ‘No.’ He said: ‘Then pay the zakah which is due on what you wear on your wrists.'”
In the same way, Asma’ bint Yazid reported: “My aunt and I, while wearing gold bracelets, went to the Prophet, upon whom be peace. He asked: ‘Did you pay their zakah?’ She related that they had not. The Prophet said: ‘Do you not fear that Allah will make you wear a bracelet of fire? Pay its zakah.'” Al-Haythami confirms that it was narrated by Ahmad, and its chain is good.
‘Aishah narrated: “The Messenger of Allah, upon whom be peace, came to me and saw me wearing silver rings. Thereupon, he asked: ‘What is this, ‘Aishah?’ I replied: ‘I made them to adorn myself for you, O Messenger of Allah.’ He said: ‘Did you pay their zakah?’ I said: ‘No, or what Allah wishes.’ Then he said: ‘Their punishment in Hell is enough for you.'” This is related by Abu Dawud, ad-Daraqutni, and al-Baihaqi.
Malik, ash-Shaf’i, and Ahmad ibn Hanbal hold that there is no zakah on women’s jewellery regardless of its value. Al-Baihaqi relates that Jabir ibn ‘Abdullah was once asked if jewellery was subject to zakah. He replied that it was not, even if its value exceeded one thousand dinars.
Al-Baihaqi also narrates the case of Asma’: “Asma’ bint Abu Bakr used to adorn her daughters with gold. Although its value was around fifty thousand dinars, she did not pay zakah on it.”
It is related in al-Muwatta’ from ‘Abdurrahman ibn al-Qasim from his father that ‘Aishah used to take care of her nieces, who were orphans under her protection, and adorned them with jewellery without paying its zakah. Also in al-Muwatta’ it is related that ‘Abdullah ibn ‘Umar used to adorn his daughters and slave girls with gold without paying zakah.
Summing up the subject, al-Khattabi concludes: “What appears in the Qur’an supports the view of those who hold that zakah is obligatory on gold and silver, and the traditions also support this. Those who did not consider it obligatory based their view on speculation and some of the traditions. However, to be on the safe side, it is better to pay.” These different views deal with allowable gold or silver adornment. As for other adornments which are prohibited – that is, a woman wearing a man’s adornment – their zakah should be paid. The same rule is applied to gold or silver utensils.