Do we use gold or silver in calculating nisab of Zakat? What is the NISAAB in grams. Kindly show how the figure is deduced from first principle.

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu 'alyhi wa sallam, is His slave and Messenger.

Zakat [obligatory charity] must be paid on gold if it reaches the Nisaab [i.e. the minimum amount liable for Zakah], which is 20 Mithqaal [a measure which equals 85 grams of pure gold, 1 Mithqaal = 4.25 grams], this means that one should pay ½ a Mithqaal as Zakat, i.e., 2.5% of the value of gold.

Zakat must be paid on silver if it reaches the value of 200 Dirhams, which is the equivalent of 595 grams of pure silver; one should then pay five Dirhams as Zakah, that is, 2.5% of the value of silver.

Similarly, if cash money reaches the equivalent of the value of 85 grams of gold, then one should pay Zakah on it.

Finally, it should be noted that one is only obliged to pay Zakah on his money if it reaches the Nisaab by itself or with other money or tradable items added to it and provided a whole lunar year elapses on it.

Allaah Knows best.