On what circumstances the hand of a thief can be cut off?
The Almighty God decrees:
وَالسَّارِقُ وَالسَّارِقَةُ فَاقْطَعُوا أَيْدِيَهُمَا جَزَاءً بِمَا كَسَبَا نَكَالًا مِنَ اللَّهِ وَاللَّهُ عَزِيزٌ حَكِيمٌ
“Cut off the hands of both male thieves and female thieves as the requital of what they earned and as a deterrent ordained by God. God is superior and He judges correctly.” (Al-Maidah 5:38)
This penalty can be implemented only if all of the following conditions apply:
1- This penalty can only be prescribed by a judge. Therefore, either the owner of the property or other eyewitnesses must apply to the authorities for the judgment first. If the owner of the property sees or catches the thief in the act and does not take the case to jurisdiction, the owner of the property has the right forgive the thief of his own free will.
2- In order to fully qualify the crime as theft, the following conditions must be met:
The stolen property,
– Must be worth a quarter golden coin or more. This amount is based on two narrations (hadiths):
“(The Prophet said) Only on quarter dinar or more, the thief’s hand can be cut off.” (Muslim, Hudud, 1(1684); Bukhari, Hudud, 14; Abu Dawood, Hudud, 12; Tirmidhi, Hudud, 16)
– Must be imperishable
– Must be taken from its place secretly
– Must be under protection and in another person’s ownership
– Must be taken out and away from the place it used to be
3- None of God’s verses address the children. That clearly means: children are not liable towards God. Their parents or guardians are responsible to teach them what is good or bad, what is lawful or forbidden, until they reach puberty. Then, when they reach the puberty, they become responsible for complying with God’s commands and prohibitions. So, a child who has not reached the puberty cannot be judged by the criminal law for his misdeeds, let alone having his/her hand cut off. Only the child’s guardian is responsible for compensating for the loss of the property owner.
4- Nobody’s hand can be cut off if a person or his/her family for whom he/she is responsible to take care of was starving and therefore stole food. In other words, if their life was in danger, the hand amputation punishment is not implemented.
5- If the crime was committed under any type of coercion, the punishment is not implemented.
6- If there are no witnesses and the thief himself/herself admits the crime and repents before being caught, the penalty is not implemented. This is because God decrees in the very next verse:
فَمَنْ تَابَ مِنْ بَعْدِ ظُلْمِهِ وَأَصْلَحَ فَإِنَّ اللَّهَ يَتُوبُ عَلَيْهِ ۗ إِنَّ اللَّهَ غَفُورٌ رَحِيمٌ
“But whoever turns around after his wrongdoing and reforms (himself), God will accept his turnaround: God is most forgiving, the most beneficent.” (Al-Maidah 5:39)
If even one of the conditions that fully qualify the crime as theft is not met or if the thief admits the crime before he is caught, then another principle called “Muqabalah bi’l-Misl”, which means “equivalent retaliation”, is implemented. In that case, the thief has to give to the aggrieved party the equivalent of the property he had stolen in addition to returning the stolen property. If the property itself could not be returned, then money twice the equivalent of property’s worth has to be given to the owner of the property: First fold as compensation for the stolen property and the second as punishment.
You can also see the following answers about this issue:
 The word we translate as “golden coin” is “dinar” in Arabic. Dinar was a golden coin that weighed 4.35 gr. at the time of issuing.