The safest answer is yes, pay Zakat on any gold and silver jewelry you own. Yes you may use them, but they still store value and are exchangeable for that value.
There are three opinions about paying Zakat on Jewelry.
- One that states it is never paid,
- Another that differentiates between jewelry worn for adornment versus that held for value,
- and the third that states any jewelry is liable for Zakat as long as it reaches Nisab.
The more correct of these three opinions is the third, that Zakat is always paid without exception on any gold or silver that is in possession for one year or more.
This is due to the generality of the hadith of Abu Hurairah found Sahih Muslim: “Never does one who possesses gold or silver not pay the due on them, except that on the Day of Judgment it will be rendered into bars and heated in the fires of Hell, and will scorch the sides, forehead and back of the person who owned it, every time it cools it will be reheated and reapplied, on a day the length of fifty thousand years, until God judges between the slaves, either to Paradise or to the Hellfire.”
The unequivocal nature of this hadith from Sahih Muslim above indicates that Zakat is due on all gold and silver without exception. Any claims that there is a difference between what is worn and what does not need specific evidence, for which there does not seem to be specific textual evidence.
Additionally, there are several hadith narrated in Abu Dawud and other collections that specifically oblige Zakat on jewelry. These hadith are the subject of debate amongst scholars, and their authenticity is challenged, but it seems that together they reach the level of being acceptable.
As for the hadith that negate Zakat from jewelry in its entirety, such as “There is no Zakat on jewelry,” then as Ibn Hajr al-Asqalani stated, this hadith is: “False and baseless.”
Based on the above, the safest opinion indicates that Zakat is due on all gold and silver without exception as until we have specific evidence to the contrary then general ruling remains applicable.