zakat presentation in english

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Zakat (Nisaab, Recipients and Calculation)

Ramadan is the month of giving and benevolence. Muslims are encouraged to emulate the Messenger of Allah (S.A.W.), to assess and pay their Zakat  during the month of Ramadan, thus combining the two Pillars of Islam  at the same time.

Zakat (alms) is the name of what a believer returns out of his or her wealth to the neediest of Muslims for the sake of the Almighty Allah. It is called Zakat because the word Zakat is from Zakaa which means, to increase, purify and bless.

Who Should Give Zakat:

The obligation of Zakat is mandatory on every Muslim who possesses the minimum Nisaab (minimum amount that is obligatory for Zakat), whether the person is man, woman, young, old sane or insane. Because the proof of Zakat in Quran and Sunnah is general and does not exclude young or insane. Allah stated that:

"Of their goods take alms so that thou mightiest purify and sanctify them..." (Surah At-Tawba 9: 103)  

Imam Ibn Hazim said that every Muslim young or old sane or insane needs to cleanse his or her wealth with Zakat because of generality of the evidence. Amr bin Shuaib reported that the Messenger of Allah (S.A.W.) said:

"Whoever is entrusted with money of an orphan should trade with it and should not leave it sitting to be used up by charity." (Tirmidhi: 641)

The point of reference in this report is that the Messenger of Allah (S.A.W.) urged the trustee on the estate of people who due to age or other reasons cannot manage their own financial affairs, to invest it in a business that will yield a return and make it grow until they are in a position to do so themselves. For, if proper investment is not made with an orphan's inheritance, it will be depleted by charity, thus leaving the orphan with little or nothing.

Click here for Zakat Calculator

The Nisaab:

The Lawgiver, Allah has prescribed the minimum amount that is obligatory for Zakat in different ranges of properties, and that minimum amount is known as ‘Nisaab’. The reason for nisaab is to ensure that no one is forced to give Zakat out of what he or she does not have, and that no wealth goes without Zakat. Nisaab is also an insurance against the tyranny of the state to tax the poor and or the neediest as is the case in many countries. Nisaab is a reference point for the average Muslim who is not sure whether he possesses the minimum wealth on which Zakat is obligatory. The wealthy need not worry about the Nisaab. Zakat is obligatory on their entire wealth and must be paid out at the end of financial year that they set for their Zakat.

The Nisaab will not be valid unless it fulfills two conditions:

1) The amount that has reached Nisaab must be the excess or surplus known as "faadil" from one's essential needs such as food, clothing, housing, vehicles, tools and machinery that is used in business. The essentials for living are exempted from Zakat.

Although what constitutes nisaab may change from one country to another, the amount that is needed for the basic needs of living in different countries is very similar, because the market place determines the prices, whether it is an official market or a non-official market. In the poorest countries people do without or live below the poverty standard, and that is why many go hungry or without basic essentials.

However, we must realize that Zakat is an act of worship (Ibadah) like Salah (Prayer) . The element of intention (niyyah) is necessary, and we should not overly rely on state agencies to determine for us the requirements of our religious duty. The so called the "consumption basket" (that is poverty level as determined the social security administration which are updated every fiscal year) may not be the same as what Islam considers minimum Nisaab.

In the industrialized countries, the consumption basket may include items that are not necessarily essential, such as entertainment, extra clothing, variety of food, eating in restaurant or eating at home, owning more than one car as opposed to having three cars in the driveway, drinking water as opposed to juices, eating regular food or special "health" food. This is why I believe it is essential that we do not lose site of the fact that Zakat is ibadah of wealth, like Salah and Fasting (Sawm) . Non-Muslims may consider all the things mentioned above as essentials while Muslims will not. Indeed, no Muslims in good standing will attempt to hide behind the label of consumption basket so as to evade Zakat.

Nisaab eliminates the possibility of injustice or unfair treatment of the Zakat payer. To suggest that if we do not follow the rules of International Monetary Fund or the arbitrary figures of social security administration or department of agriculture, we will be doing injustice to the Zakat payer is ludicrous.

2) Nisaab must mature , that is the money is not liable for Zakat unless it has remained a full year in the possession of a person. This is the understanding of the majority of the scholars. Imam Abu Hanifah  said:

"What should be considered is the existence of nisaab at the beginning and the end of the Zakat year set by the payer".

It does not matter if the nisaab money increases or decreases during the calendar year, as we will explain later.

This condition does not include farm produce, for it is due on the day it is harvested. Allah has stated in Quran:

"... But render the dues that are proper on the day that the harvest is gathered..." (Surah Al-Anaam 6:141)

According to Imam Al-Abadi, Zakat money is of two kinds: one that by its nature cannot be invested and Zakat of this category is due on the day of harvest. This includes all the farm produce that is liable for Zakat. The other is wealth that can be invested in the hope of a good return, like cash, gold or silver, because the opportunity is there that cash in one's hand can be invested for a good return. This includes currency investment, merchandise and livestock. Their Zakat is not due until they have matured in one full year.

The proof of this condition is the Hadith related by Ibn Umar (R.A.) that the Messenger of Allah (S.A.W.) said:

"He who acquires property is not liable for Zakat on it till a year passes." (Ref: Muwatta Malik Book # 17, Hadith # 586)

According to Ibn Rushd, this is the understanding of the majority of scholars, including the four rightly guided Caliphs.

Zakat on Salaries:

The condition of yearly term maturity applies to the commodities on which the Lawgiver said Zakat is due, and this includes silver, gold, modern paper currency and livestock. Paper currency is analogous to silver, therefore, it takes the case of silver. There is no Zakat on salary, earned income from wage earners or professionals or independent contractors until such money matures in a full year. There is no such thing as paying your Zakat on the day you receive your pay check. What the wage earner must know is that he or she can purify that money with charity (sadaqah) anytime they cash the pay check. Allah (SWT) states:

" And in their properties there was the right of the beggar, and the Mahrum (the poor who does not ask the others)." (Surah Adh-Dhariyat 51:19)

We can deduce from the concept of "yearly maturity" of wealth on which Zakat is due as encouraging, among other things, saving on the part of the Zakat payer, and enhances the chances for eradicating poverty, because if the poor receives his rightful share of Zakat there will be the possibility that he can take Zakat money and invest it and become a Zakat payer instead of recipient. This possibility will be lost if he receives few Zakat dollars every month. To say that the wage earner just brings his check home and spends everything on necessities and lives from check to check with nothing left over means the person is eligible for Zakat.

Using farm produce as analogous to salary for Zakat is wrong analogy. As Imam Al-Abadi said:

“These are two different categories of money. $2,500.00 cash can be invested by the person and expect a good return whereas it will be difficult to invest a bushel of corn. It can be traded as a commodity, which is what it is. This why we must know that analogy has rules that must be followed before it is applied. Certainly the jurists are unanimous that earned income, known as Almal Al-Mustafadah, should either be added to existing money and wait until that amount reaches maturity and then give their Zakat; or if there is no money on hand the time one possesses this money, he or she should wait one full year before assessing it for Zakat.”  

Zakat is one of the five Pillars of Islam and a vital element in the religion of Islam. It is the twin sister of Salah (Prayer). In Al-Quran, Allah Has stated:

" And perform As-Salat (Iqamat-as-Salat), and give Zakat and obey the Messenger (Muhammad SAW) that you may receive mercy (from Allah). " (Surah An-Noor 24:56)

"...Establish regular Prayer and give regular Alms, and loan to Allah a beautiful loan...." (Surah Al-Muzzammil 73:20)

"And they were commanded not, but that they should worship Allah, and worship none but Him Alone (abstaining from ascribing partners to Him), and perform As-Salat (Iqamat-as-Salat) and give Zakat: and that is the right religion." (Surah Al-Bayyina 98:5)

  In a famous Hadith reported by Umar Bin Khattab (R.A.) , the Messenger of Allah (S.A.W) responded to Jibreel (A.S.) and said:

"... Islam is to testify that there is no deity but Allah and Muhammad is the Messenger of Allah, to perform the prayer, to pay Zakat, to observe fasting in Ramadan, and to make pilgrimage to the house of Allah if you are able to do so...." (Sahih Al-Bukhari: 8)

There is consensus among Muslim scholars that it is mandatory on every believer who is financially able. Whoever knowingly denies this obligation, while he possesses the minimum amount, would be considered a disbeliever and a renegade from Islam. Whoever is stingy, or tries to cheat, is considered among the wrongdoers. Zakat is mandatory on four categories of items.

1. Farm produce of seeds and fruits , such as wheat, barley, rice, dates, raisins, cocoa, pistachios, coffee, cashews. Allah Has stated:

"O you who believe, give of the good things which you have (honourably) earned, and of the fruits of the earth which We have produced for you..." (Surah Al-Baqarah 2:267)

Thus, these two verses and many others indicate that Zakat is due on farm products that reached the minimum amount (nisaab). No farm product is liable for Zakat unless it is a product that is considered as food and can be stocked or saved naturally without refrigeration. If the produce is perishable fruit, such as grapes, there is no Zakat. But if one sells them they will pay their Zakat on the profit earned when it matures.

The nisaab is 612 kilos, which equals 1,346.40 lb. There is no Zakat on produce that is less than this amount. If the farm produce or crops grow dependent on rainwater, or without any man's labour or irrigation, Zakat due is one-tenth of the total. If it is grown by irrigation, then the Zakat due is half of one-tenth of the total produce. There is no Zakat on fruits like apples or oranges or vegetables which are perishable and need refrigeration for long storage, but they should be considered as any income if the profit earned from their sale reaches the amount of Zakat, then Zakat should be given.

2. Cattle, including camels, cows, sheep and goats , that are freely graze and are raised for trade and production. For Zakat to be obligatory, the number must reach the nisaab. The nisaab of camels is five, of cows 30, of sheep and goats, 40. By freely grazing is meant the animal goes out to feed without the owner buying or bringing it feed or hay. If it is not a grazing animal, there is no Zakat in the stock by itself. The stock will, however, be considered as articles of trade, then will be assessed for Zakat as articles of trade when the profit earned from their sale reaches the amount by itself or in combination with other articles of the trade.

3. Merchandise and goods of trade and commerce . This includes anything that is obtained for the business of buying and selling: land, animals, food provisions, fabric, cars, spare parts, etc. This inventory is evaluated annually and assessed for Zakat, whether the value is the same as the amount spent on it, more, or less. The owners of grocery stores, like any other business, must evaluate every item and give their Zakat. Simple bookkeeping of inventory, orders, cash on hand, and credits, that is non-delinquent loans, will give one a good picture of the Zakatable assets. But if one is unable to account for everything in the store or shop, he should assess it according to his ability until he is sure that his conscience is clear.

There is no Zakat on what is within one's dwelling or property which includes food, drinks, furniture, houses, animals, cars, clothes and shoes. The only exception is gold and silver. There is no Zakat on assets from rentals or lease, whether they are apartment units, taxi cabs, etc. That is, there is no Zakat on the apartment units, buses or cars for rental like yellow cabs company or trucks for rental or equipments. But there is Zakat on the proceeds or incomes from these rental assets if these assets reach the executable amount, either by themselves or in combination with other assets.

Business Activities:

Many scholars are of the opinion that any business activity that brings any return to the entrepreneur or investor should be assessed for Zakat. If the activity has a prescribed nisaab, such as gold, silver or paper currency, that nisaab is applied for Zakat. But if the business has no declared nisaab, its nisaab is the nisaab of commerce, one reason being that most business activities are considered as commerce and because, in actual fact, it is not factitious business name, such as GM, Apple or GE that is taxed for Zakat, it is the individual investor. We do not tax cooperation's such IBM, Apple, GM or Rajihy Bank but the individual investors, shareholders and owners of these corporations.

Indeed, there are enough rules in Zakat books to cover all types of business activity, be it cash or risk investment. If the business activity is analogous to commerce, it should be assessed the same rate as commerce. To subject the business to a different Zakat rate of 10%, which is the rate of farm products instead of its correct rate of 2.5%, the rate of commerce, is unfair and unjustified. Besides, there is no proof, even a weak one, to justify this unfair arbitrary taxation. The difference between 2.5% and 10% is high. The Zakat system is not like a state revenue collection, but Allah's `ibadah However, if a business person decides to give more than 2.5% after deducting all the expenses including depreciation, Allah will accept it from him.

4. Gold and silver, whether used for commerce or jewellery. Allah states:

"...And there are those who bury gold and silver and spend it not in the way of Allah: announce unto them a most grievous penalty. On the day when heat will be produced out of that (wealth) in the fire of hell, and with it will be branded their foreheads, their flanks and their backs. This is the (treasure) which you buried for yourselves: taste you, then, the (treasures) you buried." (Surah At-Tawbah 9:34 & 35)

By hoarding is meant refusal to give it in the path of Allah, which includes Zakat.

In a Hadith reported by Abu Hurairah (R.A.), the Messenger of Allah (S.A.W.) said:

"For the owner or possessor of gold and silver who does not fulfil its obligation, on the Day of Resurrection it will be cast into sheets of fire and be branded on his forehead, side and back. Whenever it cools it is to be repeated for him in a day whose length is the length of fifty thousand years, until the judgement is rendered among the people." (Muslim). By its obligation is meant assessing it for Zakat. In another version: "No possessor of a treasure who does not give its Zakat." [(Riyad As-Salihin: Book # 9, Hadith # 1214  (The Book of Virtues)]

  Zakat is mandatory in gold and silver, irrespective of its form: in coins, raw or nugget, or jewelry for wearing, or for rent, because of the generality of evidence of Zakat without any detail. Amr bin Shuaib on his father's authority said that his grandfather reported:

‘A woman came to the Messenger of Allah (S.A.W.) and she was accompanied by her daughter who wore two heavy gold bangles in her hands. He (S.A.W.) said to her: “Do you pay Zakat on them?” She said: “No.” He (S.A.W.) then said: “Are you pleased that Allah may put two bangles of fire on your hands?” Thereupon she took them off and placed them before the Prophet (S.A.W.) saying: “They are for Allah and His Messenger.”’ (Abu Dawud: 1563)

Narrated Abdallah bin Shaddad bin Al Had (R.A.):

‘We entered upon Aishah (R.A.), wife of the Prophet (S.A.W.). She said The Apostle of Allaah (S.A.W.) entered upon me and saw two silver rings in my hand. He asked “What is this, Aishah?” I said I have made two ornaments myself for you, Messenger of Allah (S.A.W.). He asked “Do you pay zakat on them?” I said “No” or I said Whatever Allah willed. He said “this is sufficient for you (to take you) to the Hell fire.”’ (Abu Dawud: 1565)

Zakat is due on gold when it reaches the amount of (nisaab), which is 20 Dinaar. According to a Hadith, the Messenger (S.A.W.) said:

"No Zakat on you is due until it reaches 20 dinaar." (Sahih Bukhari: 1447)

The Islamic dinaar (currency) is one mithqal, a unit of weight which weighs four and one quarter of a gram. Thus, the nisaab is 85 grams.1 gram of gold in today's current market is approx $41. The threshold for gold is $3,485 USD.

Similarly, there is no Zakat on silver until it reaches five Oqiyah, because the Messenger of Allah (S.A.W.) said:

"There is no Zakat on less than five Awsuq (of dates), or on less than five camels, or on less than five Awaq of silver." (Sahih Bukhari:1484)

Oqiyah is equal to forty Islamic dirhams. The nisaab is 200 dirhams. 200 dirham is equivalent to 595 grams. The Zakatable amount in both the gold and silver is a quarter of a tenth only (2.5% or 0.025)

Paper Currency:

There is Zakat on modern paper currency because it is equivalent to silver. During the early days of Islam, silver and gold were the currency of exchange minted into dirham for silver and dinaar for gold. Silver, not gold, had a larger circulation. Thus many scholars are of opinion that silver should be the standard for the paper currencies of today because that is more advantageous to the Zakat payer, as it raises the minimum nisaab whereas gold lowers it. Although both metals are no longer circulated, they are still considered as a security against ever fluctuating paper money.

Silver should be used as a standard to assess Zakat annually, not paper currency, even if the currency is hard currency like the US dollar, Yen and Deutch Mark or Pound Sterling. Because these currencies are backed by political decisions that may not have anything to do with the economy, the value and strength of this paper money depends largely on all haram usury system of interest rates.

Thus, the Zakat payer should look up in the local newspaper's financial or business section for the price of silver which is currently approx $15.06 per ounce. The nisaab, then, is 596 x .04=28.80 ounce multiplied by $15.06= 433.73. Therefore. The nisaab is about $450, as of December 26, 2018.

The nisaab should be based on the market value of the currency. If the money is hard currency, there will be no problem, but if the money is a non-marketable currency, like most currencies in the third world countries, the nisaab should be based on the black market, which realistically reflects the value of the currency on the money market. In any case, the silver rate should be used to assess the Zakat.

If the nisaab is determined, the Zakatable amount is 2.5%, or .025 multiplied by the amount. For instance, if the Zakatable amount is $56,000.00 it will be 56,000. x .025 = $1,400.00.

Zakat is due on gold, silver, and or paper currency, whether it is cash in hand or credit in the hands of borrowers. Zakat is due on debts or cost of merchandize or rental money. If the borrower is a wealthy person that you know will pay back the debt, the lender (that is Halaal lending free of usury) should include that money in the assessment and give its Zakat. However, one can delay Zakat on a loan until he receives payment, then return its Zakat for the past years that he was unable to assess for Zakat. If the borrower is poor or is refusing to pay the debt, there will be no Zakat on the money until the lender receives the money. Then he will assess it for Zakat of one past due year, but there will be no Zakat in the years before that.

There is no Zakat on precious stones such as diamonds, or metals such uranium, regardless of their value. Gold and silver, of course are assessed for Zakat. However, if a person possesses any of these stones or metals, he should give their Zakat like any other articles of trade. If a person possesses diamonds or any other precious stones as an edge against inflation or for ornaments, there will no Zakat on these.

How To Give Zakat

Zakat may be assessed and returned in two ways:

a) Make a record of all money earned , either daily or monthly, which has reached the nisaab and remains in the treasury. The Zakat of that money would be due one year later on the same day the money was earned and reached nisaab. This means every month's income must be set aside and assessed for Zakat and so will be the case for the rest of the months. For instance, the income of January, 2018 will be assessed for Zakat in January, 2019, and the income of February, 2018 will be assessed for Zakat in February, 2019, etc. This method of assessing Zakat is very difficult because it entails complete bookkeeping of daily or monthly earnings.

b) The best way is to set a day or a month, preferably Ramadan , for your annual Zakat return calendar, say Ramadan 1st, 1441H. One year later on the same day Ramadan, 1442H, your Zakat is due and payable. Whatever is in the savings is due for Zakat, regardless of whether all the amount in the savings reaches a year or not. For instance: if you have $20,000.00 in the savings account on the 1st of Ramadan, 1439H and one year later by the 1st of Ramadan, 1440H, there is $50,000, your Zakat will be assessed for $50,000, that is: $50.000.00 x .025= $1,250.00. If, on the other hand, by the 1st of Ramadan, 1441H the amount in the savings is $15,000.00, your Zakat will be for the amount in the savings, that is $15,000.00 x .025= $375.00. This method is the best because it is easy to assess, meets one's obligation and relieve one's conscience.

The Recipient Of Zakat

Knowing who qualifies as recipient of Zakat is an important aspect of Zakat collection in Islam. Fortunately, Allah Has been merciful to us in that He Himself spelled out the people eligible to receive Zakat. In Surah At-Tawbah, He stated:

" Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler - an obligation [imposed] by Allah. And Allah is Knowing and Wise. " (Surah At-Tawbah 9:60)

In this verse, Allah enumerated the people who deserve this divine welfare, and they are as follows:

The poor and the needy. These are individuals, and those under their care, to live on. By the poor and needy is meant the people whose income or salaries, or whatever material goods they have, fall short of the cost of living in a given environment and economy. The poor and the needy should be given what will suffice them and their families for one full year. The needy who want to get married and have no means should be given enough for this purpose, and so, too, the student who needs money for tuition, rent, food, and books. The working poor should be given supplementary Zakat. But the wealthy, or any person with enough income to live on should not be given Zakat, even if they asked for it. Instead, they should be warned and admonished for asking for what does not belong to them.

In a Hadith reported by Abdullah bin Umar (R.A.), the Messenger of Allah (S.A.W) stated:

"A man keeps on asking others for something till he comes on the day of Resurrection without any piece of flesh on his face." (Sahih Bukhari: 1474, 1475)

This Hadith indicates a humiliating appearance before Allah that awaits a person who asks illegally.

Some said: this Hadith implies Allah will punish a person with the very limb, the face, that he used to impress on others to give him their money unlawfully.

In another Hadith reported by Abu Hurairah (R.A.), the Messenger of Allah (S.A.W.) said:

“Whoever begs from people so as to accumulate more riches, he is asking for alive coal from hell, so let him ask for a lot or a little.” (Ibn Majah: 1838)

This Hadith indicates the severity of the punishment, the more one asks the more punishment, the less one asks the less the punishment.

In another Hadith, reported by Hakeem bin Hizaam (R.A.) said:

‘I asked the Prophet (S.A.W.) (for some money) and he gave me, and then again I asked him and he gave me, and then again I asked him and he gave me and he then said, "This wealth is (like) green and sweet (fruit), and whoever takes it without greed, Allah will bless it for him, but whoever takes it with greed, Allah will not bless it for him, and he will be like the one who eats but is never satisfied. And the upper (giving) hand is better than the lower (taking) hand." (Sahih Bukhari: 6441)

This Hadith gave an analogy between money and green, ripened fruit that people love to eat. Thus, it indicates that both are greatly loved but easily finished. For money that is easy come easy go, one must be careful about the punishment that awaits the illegal eater. If a person asks for Zakat and there are no signs of wealth, and he does not know that he should not ask, or a person who is well and able, who can work, but does not; if these people do not know that it is not permissible for them to ask, it may be given anyway.

In a Hadith reported by Ubaidullah bin Adiyy bin Al-Khiyar (R.A.) narrated that:

‘Two men came to the Messenger of Allah (S.A.W.) and asked for Zakat. He (S.A.W.) looked at them closely and found them strong and able, he (S.A.W.) said, "If you want I will give you. But you should know that the wealthy or an able person who can work has no share in Zakat" (An-Nasai: 2598)

Those who administer the Zakat department, assigning people for collecting, bookkeeping, making lists of people eligible for Zakat, and a financial calendar. These people will receive Zakat as compensation for their work, even if they are wealthy. This does not include a person who works as an agent for one or two wealthy people to take Zakat for himself. They should donate their time for Zakat disbursement and do it with honesty and truthfulness. If they cannot, they should be paid or rewarded for their time. In a Hadith related by Abu Musa (R.A.), the Messenger of Allah (S.A.W.) said:

"An honest Muslim storekeeper who carries out the orders of his master and pays fully what he has been ordered to give with a good heart and pays to that person to whom he was ordered to pay, is regarded as one of the two charitable persons." (Sahih Bukhari: 1438)

  That is, he will give the Zakat money to any of the eligible recipients of Zakat. He should carry on the duty voluntarily, but if he can not distribute the money without being paid, the Zakat payer should pay him for his work. The payment for the service of distributing Zakat should not come out of Zakat money.

The new converts to Islam whose hearts we want to harmonize into the fold of Islam, either because their faith is weak or we are afraid of their being harmed, should be given Zakat to strengthen their Iman or until we no longer fear their harm.

The bonds person who has contracted with his master to buy himself out of bondage deserve Zakat and should be given enough to pay off their debt to the master and be freed themselves; similarly, Muslim prisoners of war if their freedom is tied to monetary payment, deserve Zakat sufficient enough to secure their release.

On the other hand, if a person accidentally killed someone and have no means to pay off the blood money, he should be helped from Zakat funds.

The people in debt are of two kinds:

  (a) The guarantor, who takes the responsibility of someone else's debt so as to reconcile the two warring parties, to extinguish the fire of fitnah between them. If the person requests Zakat money to pay off this debt he should be given it, which will encourage him to continue in this noble cause.

In a Hadith reported by Qubaysah Al-Hilali (R.A.), he said:

‘I became a guarantor for a payment, and I came to Messenger of Allah (S.A.W.). He (S.A.W.) said: “Wait till I receive the sadaqah (charity) and I shall order it to be given to you.” He (R.A.) then said: “Begging, Qabisah, is allowable only to one of three classes: 1- A man who has become a guarantor for a payment to whom begging is allowed till he gets it, after which he must stop (begging); 2- A man who has been stricken by a calamity and it destroys his property to whom begging is allowed till he gets what will support life (or he said, what will provide a reasonable subsistence); 3- And a man who has been smitten by poverty, about whom three intelligent members of his people confirm by saying: So and so has been smitten by poverty, to such a person begging is allowed till be gets what will support life (or he said, what will provide a reasonable subsistence), after which he must stop (begging). Any other reason for begging, Qabisah, is forbidden, and one who engages in such consumes it as a thing which is forbidden. (Abu Dawud: 1640)

(b) Whoever incurs debt and has no money to pay it back will be given from Zakat to help pay his debt , whether the amount is large or small; or his creditor should be paid directly on his behalf, so long as it is paid off.

Zakat can be given in the path of Allah. By this is meant to finance, a Jihad effort in the path of Allah, not for Jihad for other reasons. The fighter (mujahid) will be given as salary what will be enough for him. If he needs to buy arms or some other supplies related to the war effort, Zakat money should be used provided the effort is to raise the banner of Islam.

The wayfarer. This is the traveler who in a strange land runs out of money. He or she deserves Zakat, enough money to take him back to his country, even if he is wealthy and can find someone to loan him the money. On his part, he should take with him on his trip sufficient money, if he is wealthy, so that he will not need Zakat. Zakat money can not be used to pay off other obligations, such as giving Zakat money to people you are obligated to take care of by law; or Zakat money can not be used to pay for hotel and food expenses.

It is, however, permissible to give Zakat to a wife or family member, provided it is not part of their daily living expense money, but is needed to pay off a debt for one's wife if she can not pay it. So is the case for one's parents if they can not pay their debt.

Zakat money may be given to members of the family for their expenses if one is not obligated to take care of them financially. The wife can pay off a debt of her husband with Zakat money, because he may be among the eight eligible recipients and she is not obligated to spend on him as he is on her.

The eight eligible recipients of Zakat can be denied their right to Zakat without proof from Al-Quran or Sunnah. In a Hadith reported Abu Said Al-Khudri (R.A.):

‘Zainab the wife of Ibn Masud (R.A.) came along and said to the Prophet (S.A.W.) “O Messenger of Allah (S.A.W.)! You have commanded us today to give Sadaqah (charity). I have some jewelry of mine and I wanted to give it as Sadaqah, but Ibn Masud (R.A.) claims that he and his children are the most entitled to my Sadaqah. (deserve it more than anyone else.)' The Messenger of Allah (S.A.W.) said: “Ibn Masud is right. Your husband and your children are more deserving.’ (Sahih Bukhari: 1462)

No loan should be written off as Zakat because Zakat is taken and given. Allah Has said:

" Take Sadaqah (alms) from their wealth...." (SurahAt-Tawba 9:103)

And in a Hadith, the Messenger of Allah (S.A.W.) has been reported as saying:

" Allah has made it obligatory for them to pay the Zakat from their property and it is to be taken from the wealthy among them and given to the poor." (Sahih Bukhari: 1395)

Thus, writing off debt is not taken. For instance, if you loan a person money, you cannot write off that loan as a Zakat. However, it could be written off as sadaqah charity. Furthermore, loan, delinquent or not, is considered an absent money, therefore, it should not be transacted in Zakat. for Zakat is assessed only in cash in hand. Besides, debt money is valued less than cash in the hand, and using that money for alms is like exchanging good money for bad.

The assessor of alms should try to give his Zakat to an eligible person, but if he makes a mistake and gives it to an ineligible person it is accepted. In a Hadith related by Abu Hurairah, he said the Messenger (S.A.W.) said:

"A man expressed his intention to give charity, so he came with his charity and placed it in the hand of an adulteress. In the morning the people were talking and saying charity was given to an adulteress last night. The donor said: O Allah, to thee be the Praise - charity to an adulteress! He then again expressed his intention to give charity, so he went out with it and placed it in the hand of a rich person. In the morning the people were talking and saying charity was given to a rich person. The donor said, O Allah to You be the praise - charity to a rich man! He then expressed his intention to give charity, so he went out with his charity and placed it in the hand of a thief. In the morning the people were talking and saying charity to the thief. So the man said, O Allah to You be the praise (what a misfortune that charity has been given) to the adulteress, the rich and the thief! Then someone came to him and told him your charity has been accepted. As for the adulteress the charity might become the means whereby she might restrain from fornication. The rich man might perhaps learn a lesson and spend from what Allah has given him, and the thief might thereby restrain from committing theft. (Muslim: 1022)

Source: http://www.missionislam.com/knowledge/zakat.htm

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Gaza Emergency: Donate Now !

What is zakat, the short answer.

Zakat is a charity God obligates Muslims to pay yearly on their money and property. Its payment is made to the poor, vulnerable, and deserving as their divinely established right. The Prophet Muhammad, on him be peace, established Zakat as the third of the five pillars that Islam is built on.

Who Receives Zakat?

Muslims pay Zakat to eight categories of eligible people set by God in the Quran (Surat Al-Tawbah, 9:60):

The Poor (in dire need prevented from asking)

The Indigent (whose destitution drives them to ask)

Those Administering Zakat’s collection and distribution

Those whose hearts are to be reconciled

Those in bondage (slaves to be freed and captives)

The Debt-Ridden

In the Cause of God

The Wayfarer (stranded, displaced, or cut off from resources while traveling)

What Does Zakat Foundation Do with Your Zakat?

The poor and indigent make up the top priorities of Zakat, and these are the people in desperate need that we at the Zakat Foundation focus on distributing your Zakat to. When you pay your Zakat through the Zakat Foundation, you are sending your charitable offering directly to widows and orphans; refugees, the displaced of war, and victims of communal violence; and to families struck by earthquakes, storms, drought, climate change, and other natural disasters.

Zakat Foundation uses 100 percent of your Zakat offering for Zakat eligible causes, reaching the most needful people in the world, at home and abroad. Last year, we used 11 cents per dollar on average as designated Zakat administrators working to collect and distribute your Zakat directly to the world’s impoverished, war-ravaged, and disaster-stricken.

What Do You Gain from Paying Zakat?

By paying your Zakat, you fulfill God’s commandment on you, make your Salat (prayers) count, and give thanks to God for His blessings on you. Your Zakat payments cause God’s blessing on you in the form of your money and property to grow — both for you and for those in need whom your Zakat helps. Your accepted Zakat purifies your soul from sin and greed, and it cleanses your wealth from the inevitable taint of worldly corruption.

What Wealth Is Zakat Paid On?

Muslims pay Zakat from the different kinds of their wealth that grow, or that can grow (see What Qualifies Wealth for Zakat? ). Most of our wealth is in the form of personal and business wealth, as money, goods, and assets, and includes gold, silver, and precious items used as stores of value; stocks, shares, bonds, retirement accounts and pension instruments (IRAs, Keoughs, deferred income, 401Ks, cash value of insurances, bitcoin, etc.); loans expected repaid, tax refunds, refundable deposits, due salaries or payments; as well as inventory, merchandise, receivables income, investment properties, etc. (see Zakat Calculator ).

How Much Is Zakat’s Payment?

Zakat is paid on these wealth forms at 2.5 percent of one’s holdings after a year has passed on them. The year, or hawl , begins when one’s eligible wealth reaches its threshold amount, called nisab , which is equivalent to 3 U.S. ounces, or 85 grams, of gold. (Note: Gold in the market is usually measured in troy ounces, making nisab 2.75 troy oz). Nisab on 9 Mar 2020 was $4,588.30. (see How Is Zakat Calculated on Wealth? )

The Prophet, on him be peace, established the thresholds for the different kinds of qualified wealth, also including crops, livestock, and treasure troves at different Zakat rates (see What Qualifies Wealth for Zakat?)

Zakat Al-Mal and Zakat Al-Fitr

There are two types of Zakat that God and His Messenger, on him be peace, have obliged us to pay: Zakat Al-Mal , or Zakat on Wealth, and Zakat Al-Fitr, the Zakat of Fast-Breaking , for the completion of the fasting month of Ramadan.

Zakat Al-Fitr has no minimum wealth threshold. Everyone pays it, for each member of the household. It can be given to all the eight categories of Zakat Al-Mal listed above, but it too has a special emphasis on the poor and needy, especially to make them happy on the day of the Eid Al-Fitr celebration. It should be paid before the Eid Prayer. Its value equivalency is usually established in the month of Ramadan, which is acceptable to most, but it was traditionally a sa‘ , 4 double-handfuls of food, as in dates, barley, raisins, or dried yoghurt — amounts that would fulfill an average household with it.

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Zakat Presentation with Q&A Live Online (03/27)

Zakat is the obligatory charity that is due upon every Muslim adult. Sounds simple enough, but many of us do not realize what this truly means, as how we define wealth, debt, needs and recipients has become more complex. As Ramadan is fast approaching, there is no better time to gain a clearer understanding of one of the pillars of our faith. As our Beloved Prophet ﷺ exemplified, this month is one of charity and giving. Intentions and understanding are essential.    

This must-watch presentation on the essentials of Zakat shared by Darul Qasim’s Mufti Hisham Dawood, Chair of the Department of Islamic Law and Darul Ifta is not only timely, but extremely practical and relevant. He approaches the topic through a traditional lens, but is careful to translate key concepts and ideas for Muslims living in the US. His presentation is built around these 4 areas of discussion:    

• Defining Zakat and the payer
• Nisab types and amounts
• A discussion on the conditions of nisab: What constitutes the lunar year; scenarios in which zakat is obligatory and how much; what constitutes needs; how is debt defined/understood
• Zakat recipients: who can and cannot receive zakat?  
• FAQ’s: He delves into some of the most frequent questions posed by Muslims in the US

Zakat: purifying and blessing your wealth

• News > Zakat: purifying and blessing your wealth

“And establish prayer and give Zakat, and whatever good you put forward for yourselves – you will find it with Allah.” (2:110, Qur’an)

As one of the pillars of Islam, Zakat is a form of obligatory charity that has the potential to ease the suffering of millions.

With the literal meaning of the word being ‘to cleanse,’ Muslims believe that paying Zakat purifies, increases and blesses the remainder of their wealth.

“Whoever pays the zakat on his wealth will have its evil removed from him” (Ibn Khuzaimah and at-Tabaraani).

Zakat is also a spiritual connection to one’s maker – to purify your wealth for the will of Allah (swt) is to acknowledge that everything we own belongs to Him, and it is for Him that we strive to end poverty and help our brothers and sisters.

According to the Hanafi madhab, Zakat is 2.5% of wealth that has been in one’s possession for a lunar year. If wealth amounts to less than a threshold figure, termed the  nisab , then no Zakat is payable. If wealth amounts to more than the nisab, Zakat becomes obligatory.

To find out if you are eligible, use our  Zakat Calculator .

“Of their goods, take Zakat, so that you might purify and sanctify them.” (9:103, Qur’an)

Islamic Relief utilises Zakat to help some of the world’s poorest and most destitute communities. Your donations bring joy to these people, and brings hope that one day they will be able to give rather than receive Zakat.

Purify your wealth by donating today.

Director of Network and Resource Development

Adnan joined Islamic Relief in 2004 as a regional fundraiser in the UK. He worked in multiple roles over 10 years at Islamic Relief UK, including setting up the first digital team and leading the growth of digital fundraising and engagement. Adnan also led numerous fundraising and marketing campaigns, which played a significant part in the growth of Islamic Relief UK.

Having moved to Islamic Relief Worldwide in 2014, Adnan has held different roles that have helped grow Islamic Relief’s global digital footprint into new geographic territories, supporting Islamic Relief members with their digital and marketing growth as well as developing new products and initiatives for the Islamic Relief family.

Adnan graduated in Industrial Design and Technology from Loughborough University. He has since completed an Advanced Diploma in Business Administration from Durham University and a Diploma in Digital Marketing from the Institute of Data and Marketing.

Nadeem Azhar

General Counsel

Nadeem joined Islamic Relief Worldwide in September 2022. He has worked in the charitable sector for over a decade.

He studied Modern History and Politics at Manchester University, and at the University of Law in London before qualifying as a solicitor in 2011.

Nadeem is an experienced corporate, commercial and governance lawyer, having worked with various faith-based and grant making charities as well those in health and education settings. He was a partner at a law firm in London before moving in-house where he focused on setting up and restructuring charities and social enterprises.

Most recently, Nadeem was Lead Counsel at Mind, a leading mental health charity, where he co-authored a new federation agreement, revamped legal processes, and played a major role in developing its strategic and fundraising partnerships.

Nadeem has been a charity trustee for the Seafarers Charity, as well as many grant-making bodies and theatre companies.

Adnan Hafiz

Director of Finance

Director of International Programmes

Managing Director, Humanitarian Academy for Development (HAD)

Director of External Relations and Advocacy

Martin Cottingham joined Islamic Relief in 2012 as IRUK Media Relations Manager, and was appointed Head of Communications in 2015 before taking up his current position as Director of External Relations and Advocacy for Islamic Relief Worldwide.

Martin has helped Islamic Relief to increase its mainstream media profile and expand its campaigning work, producing hard-hitting advocacy reports on floods in Pakistan (2011) famine in Somalia (2012) disaster risk reduction (2013) and aid to Afghanistan (2014). He has over 20 years’ experience working in media, communications and marketing roles for international development and environmental charities.

Martin graduated from the University of London with a degree in English and Drama (1982-85) then trained as a journalist with a postgraduate diploma at City University (1986-87). He has previously worked for Christian Aid as Editor of Christian Aid News and Media Relations Manager (1988-97) for Oxfam as Regional Campaigns Manager (1997-2000) and at the Soil Association as Marketing Director (2001-2006), as well as working for a wide range of organisations as a freelance writer, researcher and communications consultant.

Director of Islamic Relief UK

Chief Executive Officer

Waseem Ahmad joined the Islamic Relief family over 24 years ago, serving as Programme Officer in the Balochistan province of south-western Pakistan before becoming Head of Programmes in Pakistan. Waseem then moved to Oxfam and Tearfund before returning to Islamic Relief to establish our mission in Malawi. Later serving as Head of Programme Funding and Partnerships, Waseem led the response to major crises across the globe, including the East Africa drought, Pakistan earthquake and the Indian Ocean Tsunami.

Waseem then served for nearly 6 years as our Director of International Programmes, during which time the charity secured and retained the coveted Core Humanitarian Standard certification in recognition of the quality of our programming. He was appointed CEO of Islamic Relief in May 2021.

With a special interest in community mobilisation and infrastructure, Waseem received an MSc in Project Planning and Management from the University of Bradford, as well as an MSc in Economics from Arid Agriculture University in Rawalpindi, Pakistan.

Waseem has also worked for Lepra Health in Action and is a member of the International Civil Society Centre’s Board of Trustees. The father-of-3 enjoys walking and playing football, and is a keen birdwatcher.

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The Clear Evidence

Guidance and Charity

Videos, Presentations and Books on Zakat – Dr. Mohammad Najeeb Qasmi (Urdu, English, Hindi)

Last Updated: May 13, 2020 — Published: March 8, 2019 41 Comments

Video Presentation on Zakat (Urdu)

Audio / Podcast: Presentation on Zakat (Urdu)

Video lecture on zakat on gold and silver jewelry (urdu).

Audio / Podcast: Zakat on Gold and Silver Jewelry (Urdu)

Video and audio lectures on zakat (urdu).

Zakat o Sadqat k Masail – Book on Zakat (Urdu)

Zakat kese ada karain – presentation on zakat (urdu).

“مسائل زکوٰۃ سمجھنے کا بالکل نیا انداز السلام علیکم ورحمۃ اللہ وبرکاتہ،،، اِس پریزیٹیشن سے ہر شخص آسانی سے مسائل زکوٰۃ سے واقف ہوسکتا ہے۔” – محمد نجیب قاسمی سنبھلی  

How to Pay Zakat – Presentation on Zakat (English)

“Assalamualikum Warahmatullah, Zakat Presentation – New Way of understating the Masail of Zakat . I hope that this presentation on the Meaning and Commandment of Zakat will be useful for understanding the Masail of Zakat . This presentation has been translated by a sister in Islam. May Allah reward her for her sincere effort.” – Dr. Mohammad Najeeb Qasmi

Zakat on Gold and Silver Jewelry – Book on Zakat on Ornaments (English, Hindi, Urdu)

“Assalamu Alaikum Warahmtullah, An important article regarding Zakat on Ornament in English, Urdu & Hindi. The majority of Ulama are well convinced being Zakat obligatory on usable gold or silver jewelry, whether ornaments be equal to the minimum amount of gold liable to Zakat or more and one full year passed over it.” – Dr. Mohammad Najeeb Qasmi

“قرآن وحدیث کی روشنی میں جمہور علماء نے فرمایا ہے کہ استعمالی زیوارت پر بھی زکوٰۃ واجب ہے اگر وہ نصاب کو پہنچ جائے۔ سعودی عرب کے مشہور عالم دین شیخ بن باز ؒ کی بھی یہی رائے ہے، جو اُن کے فتاوے، کتابوں اور تقاریر میں آج بھی محفوظ ہے۔ ” – محمد نجیب قاسمی سنبھلی  

Zakat on Gold and Silver Jewelry (English)

Omar Farooq, Abdullah Bin Masoud, Abdullah Bin Abbas, Abdullah Bin Amr Bin Al-A’as (May Allah pleased with them), similarly famous and renowned Tabeien, Saeed Bin Jobair, Ata’a, Mujahid, Ibn Sirin, Imam Zohari, Imam Sauri, Imam Auzaie and the great Imam Abu Hanifah (May Allah’s mercy fall upon them)  are well convinced being Zakat obligatory on usable gold or silver jewelry, whether ornaments be equal to the minimum amount of gold liable to Zakat or more and one full year passed over it, the following several evidences are being presented in this context:

{1} The general command of the Holy Quran and Sunnah in which being Zakat obligatory on gold or silver without any condition (whether for use or non-use)is mentioned and in these holy verses and Ahadith, harsh and severe warnings for negligence in non-payment of Zakat, are mentioned. This generality is obviously found in numerous Verses and Ahadith. Due to brevity, I confine this subject to one verse and one Hadith only:

الَّذِينَ يَكْنِزُونَ الذَّهَبَ وَالْفِضَّةَ وَلَا يُنفِقُونَهَا فِي سَبِيلِ اللَّهِ فَبَشِّرْهُم بِعَذَابٍ أَلِيمٍ (34) يَوْمَ يُحْمَىٰ عَلَيْهَا فِي نَارِ جَهَنَّمَ فَتُكْوَىٰ بِهَا جِبَاهُهُمْ وَجُنُوبُهُمْ وَظُهُورُهُمْ ۖ هَٰذَا مَا كَنَزْتُمْ لِأَنفُسِكُمْ فَذُوقُوا مَا كُنتُمْ تَكْنِزُونَ (35) {سورة التوبة 34 و 35}َ

And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment. (34) The Day when it will be heated in the fire of Hell and seared therewith will be their foreheads, their flanks, and their backs, (it will be said), “This is what you hoarded for yourselves, so taste what you used to hoard.” (35)(Tawba 34 & 35)…….. The Messenger of Allah said that the wealth whose Zakat is paid, does not enter within the category of (كنزتم stored)(Abu Daud, Musnad Ahmad). Thus, the gold and silver whose Zakat is not being paid, so, on the day of resurrection, that gold and silver will be heated in the fire of hell, and then their foreheads, flanks and backs will be seared— May Allah, the Exalted, help us to pay Zakat of all wealth, gold and silver and save all of us from painful torment! Amen.

عن أبي هُرَيْرَةَ (رضي الله عنه)، قال قَالَ رَسُولُ اللَّهِ صلى الله عليه وسلم ‏”‏ مَا مِنْ صَاحِبِ ذَهَبٍ وَلاَ فِضَّةٍ لاَ يُؤَدِّي مِنْهَا حَقَّهَا إِلاَّ إِذَا كَانَ يَوْمُ الْقِيَامَةِ صُفِّحَتْ لَهُ صَفَائِحَ مِنْ نَارٍ فَأُحْمِيَ عَلَيْهَا فِي نَارِ جَهَنَّمَ فَيُكْوَى بِهَا جَنْبُهُ وَجَبِينُهُ وَظَهْرُهُ كُلَّمَا بَرَدَتْ أُعِيدَتْ لَهُ فِي يَوْمٍ كَانَ مِقْدَارُهُ خَمْسِينَ أَلْفَ سَنَةٍ حَتَّى يُقْضَى بَيْنَ الْعِبَادِ فَيُرَى سَبِيلُهُ إِمَّا إِلَى الْجَنَّةِ وَإِمَّا إِلَى النَّارِ ‏” {مسلم ، كتاب الزكاة ، باب فيمن لا يؤدي الزكاة}

Abu Huraira reported Allah’s Messenger (way peace be upon him) as saying: If any owner of gold or silver does not pay what is due on him, when the Day of Resurrection would come, plates of fire would be beaten out for him; these would then be heated in the fire of Hell and his sides, his forehead and his back would be cauterized with them. Whenever these cool down, (the process is) repeated during a day the extent of which would be fifty thousand years, until the judgment is pronounced among servants, and he sees whether his path is to take him to Paradise or to Hell.

In the above mentioned Verse and Hadith, a painful punishment is reported in general, due to non-payment of zakat on gold or silver, whether they are ornaments for use or gold and silver for trading. It is therefore, in the Holy Quran, no exclusion or exemption from Zakat of usable ornaments is mentioned at any occasion.

{2}  Abdullah bin Omar (RA) reported: A woman came to the Messenger of Allah (PBUH) and she was accompanied by her daughter who wore two heavy gold bangles in her hands. He said to her: Do you pay zakat on them? She said: No. He then said: Are you pleased that Allah may put two bangles of fire on your hands? Thereupon she took them off and placed them before the Prophet (PBUH) saying: They are for Allah and His Apostle. (Sunan Abi Dawud, Chapter: On the Meaning of Kanz (Treasure) and Zakat on Jewellery, Musnad Ahmad – Tirmidhi – Darqutni)Imam Nawavi, the explainer of Muslim and Sheikh Naseruddin Albani has authenticated this Hadith.

{3}  A’ishah (RA), wife of the Prophet (PBUH) said that the Apostle of Allah (PBUH) entered upon me and saw two silver rings in my hand. He asked what’s this Aisha. I said I have made two ornaments myself for you, Messenger of Allah (PBUH). He asked do you pay zakat on them. I said no or I said Whatever Allah willed. He said this is sufficient for you (to take you) to the Hellfire (Sunan Abi Dawud 1/244 & Darqutni).

A group of Mohaddesin has authenticated this Hadith. Imam Khattabi has mentioned it in (Ma’alemussonan 3/176) explaining that the most likely this ring alone does not complete the course of Zakat, this clearly means that if these rings are included in other ornaments and completed the course, then their Zakat must be paid. The same justification is stated by Imam Sufiyan Sauri.

{4}  Asma’a Bint Yazid (May Allah pleased with her) said: I and my aunt came to the Prophet (PBUH) and we had worn the bracelets of gold. He said to us: “Do you pay their Zakat?” We said: No. He, said, “Aren’t you afraid that Allah will wear you the bracelets of fire tomorrow on the Day of resurrection? (Due to non-payment of their Zakat). So, you have to pay their zakat (Musnad Ahmad). A group of Mohaddasin has authenticated this Hadith.

Being Zakat obligatory on jewellery is mentioned in number of Ahadith. We mentioned here only three Ahadith avoiding prolongation.   

The second school of thought of Muslim Ummah who is of the view that Zakat is not obligatory on usable ornaments, they generally present two arguments:

• Rational Argument: Allah Almighty made Zakat obligatory on the wealth that may be augmented and grown, whereas there is no growth in the jewelry of gold and silver— Whatever the case may be, in fact there is a growth in the ornaments too, thus by the increase in the value of gold and silver, the value of ornaments are also increased. Nowadays, the profit margin is found in gold more than other trade deals.
• Few Ahadith and Companions’ quotations: They are all denied and weak Hadiths, as Sheikh Naseruddin Albani has written in his book named (إرواء الغليل في تخريج أحاديث منابر السبيل) with evidences and arguments.

The majority of Indian Subcontinent’s scholars have written that if the usable jewelry reaches the course (minimum amount for the obligation of zakat), then it is obligatory to pay zakat. In the light of the Quran and Sunnah, the same opinion is of the former Mufti of Kingdom of Saudi Arabia Sheikh Abdul Aziz Bin Baaz (May Allah’s mercy fall upon him) “that Zakat is obligatory on usable ornaments.”

Rule of Thumb

On the subject under discussion, the Muslim Ummah is divided into two schools of thought from a long time. Every school of thought has resorted to the prophetic Ahadith for support of its stance. But no one can deny the fact that wherever in the holy Quran, severe warnings are indicated on non-payment of zakat on gold and silver, at none of occasions/places, any difference between usable and trading gold is reported. Moreover, there is no Hadith which cannot be argued or criticized, out of stock of Ahadith that exclude usable jewelry from zakat. On the contrary, some of authentic Hadith do clearly guide being zakat obligatory on usable jewelry. The Mohaddis like Sheikh Naseruddin Albani has also considered some of these Ahadithas authentic. Even though, if there is no Hadith for being zakat obligatory on usable ornaments, then in the light of the general ruling of the holy Quran, we should pay zakat on every kind of gold and silver, whether usable or not, so that, we could rescue ourselves from painful torment and shame and humiliation on the day of resurrection. Moreover, in declaring zakat obligatory on usable ornaments, there is a benefit for poor, orphans and widows, so that the wealth would not be confined in a few houses/families, but by extending this fund as help, we will do our best to make our society better.

Those Ahadith mentioned above in that, the prophet (PBUH) has also obligated zakat on usable ornaments, a group of Mohaddesin is agreed upon being these Ahadith as authentic, however, some Mohaddesin has decided that there is a weakness in their narration source. But the safe side is that we should pay the zakat for usable ornaments, so, we could save ourselves from stricter threats and warnings mentioned in the Holy Quran and Sunnah for non-payment of zakat. Moreover, along with purification, the growth and augmentation could be possible in our wealth only on the condition that we will completely pay zakat of our wealth. Because there is no promise of purification and growth in the wealth until full zakat is paid. Hence, some of companions and Tabeien who do not see zakat in usable jewellery and we well know after being acquainted with their living conditions that they against their needs, had been considering the success of their world and hereafter in fulfilling of other’s needs, and they had been spending a great part of their wealth for God’s sake. The historical books are filled with such events and stories. At such a time when a large segment of the Muslim Ummah is not ready to pay Zakat, much less they will help their poor brethren with charities and other material aids. It is, therefore, more precaution is in payment of zakat for usable jewelry, so that we can save ourselves by extending material assistance to poor, orphans and widows not only from torment on Day of Resurrection, but also we should be entitled of great reward.

Few Clarifications

• If jewelry is not for use, but they are kept to utilize in case of a trouble in future (for example marriage of daughter) and more than a year has passed over them and was not used, then in this event, all scholars are agreed upon being zakat obligatory on this jewelry, e.g. the second school of thought is also agreed upon it.
• Upon payment of jewelry zakat, the sale value of old gold will be taken into consideration. For instance, the gold which is possessed by you, if you sell it in the market, then, what would be the value of that, the same value will be taken into consideration upon payment of zakat.
• There is consensus among Muslim Ummah on not being zakat obligatory on the diamond, because Islamic Shariah has counted it as valuable stones. However, if they are kept for trading, then if reach the course of zakat, so their zakat will be obligatory.
• If someone possesses cash or bank balance beside gold and silver, thus he has to pay their zakat, however, there are two basic conditions for them:
• They should be either equal to the course or more
• One year has already passed over them.

Video: Zakat on Gold and Silver Jewelry (English)

Audio / Podcast : Zakat on Gold and Silver Jewelry (English)

بسم الله الرحمن الرحيم

اَلْحَمْدُ لِله رَبِّ الْعَالَمِيْن،وَالصَّلا ۃ  وَالسَّلام عَلَی النَّبِیِّ الْکَرِ يم  وَعَلیٰ آله وَاَصْحَابه اَجْمَعِيْن ۔

• سونے یا چاندی کے زیورات پر زکاۃ

حضرت عمر فاروقؓ ، حضرت عبد اللہ بن مسعودؓ ، حضرت عبد اللہ بن عباسؓ، حضرت عبداللہ بن عمروبن العاصؓ، اسی طرح مشہور ومعروف تابعین حضرت سعید بن جبیرؒ ، حضرت عطاءؒ ، حضرت مجاہدؒ ، حضرت ابن سیرینؒ ، امام زہریؒ ، امام ثوریؒ ، امام اوزاعی ؒ اور امام اعظم ابوحنیفہ ؒ قرآن وسنت کی روشنی میں عورتوں کے سونے یا چاندی کے استعمالی زیور پر وجوبِ زکاۃ کے قائل ہیں، اگر وہ زیور نصاب کے مساوی یا زائد ہو اور اس پر ایک سال بھی گزر گیا ہو، جس کے مختلف دلائل پیش کئے جاتے ہیں : قرآن وسنت کے وہ عمومی حکم جن میں سونے یا چاندی پر بغیر کسی (استعمالی یا غیر استعمالی ) شرط کے زکاۃ واجب ہونے کا ذکر ہے اور ان آیات واحادیث شریفہ میں زکاۃ کی ادائیگی میں کوتاہی کرنے پر سخت ترین وعیدیں وارد ہوئی ہیں۔ متعدد آیات واحادیث میں یہ عموم ملتا ہے، اختصار کی وجہ سے صرف ایک آیت اور ایک حدیث پر اکتفاء کرتا ہوں : جو لوگ سونا یا چاندی جمع کرکے رکھتے ہیں اور ان کو اللہ کی راہ میں خرچ نہیں کرتے (یعنی زکاۃ نہیں نکالتے) سو آپ ان کو ایک بڑے دردناک عذاب کی خبر سنادیجئے، جو اس روز واقع ہوگا کہ ان (سونے وچاندی) کو دوزخ کی آگ میں تپایا جائے گا، پھر ان سے لوگوں کی پیشانیوں اور ان کی کروٹوں اور ان کی پشتوں کو داغا جائے گا۔ اور یہ جتایا جائے گا کہ یہ وہ ہے جس کو تم اپنے واسطے جمع کرکے رکھتے تھے۔ سو اب اپنے جمع کرنے کا مزہ چکھو۔۔۔۔۔ (سورۂ التوبہ ۳۴،۳۵) نبی اکرم صلی اللہ علیہ وسلم  نے فرمایا: جس مال کی زکاۃ اداکردی جائے وہ کنز تم (جمع کئے ہوئے) میں داخل نہیں ہے۔ (ابوداؤد، مسند احمد) غرضیکہ جس سونے وچاندی کی زکاۃ ادا نہیں کی جاتی ہے، کل قیامت کے دن وہ سونا وچاندی جہنم کی آگ میں تپایا جائے گا، پھر اس سے ان کی پیشانیوں، پہلوؤں اور پشتوں کو داغا جائے گا۔۔۔۔ اللہ تعالیٰ ہم سب کو تمام مال اور سونے وچاندی کے زیورات پر زکاۃ کی ادائیگی کرنے والا بنائے تاکہ اس دردناک عذاب سے ہماری حفاظت ہوجائے۔ آمین۔ حضور اکرم صلی اللہ علیہ وسلم  نے ارشاد فرمایا: کوئی شخص جو سونے یا چاندی کا مالک ہو اور اس کا حق (یعنی زکاۃ) ادا نہ کرے تو کل قیامت کے دن اس سونے وچاندی کے پترے بنائے جائیں گے اور ان کو جہنم کی آگ میں ایسا تپایا جائے گاگویا کہ وہ خود آگ کے پترے ہیں۔ پھر اس سے اس شخص کا پہلو، پیشانی اور کمر داغ دی جائے گی اور قیامت کے پورے دن میں جس کی مقدار پچاس ہزار سال ہوگی، باربار اسی طرح تپاتپاکر داغ دئے جاتے رہیں گے ، یہاں تک کہ ان کے لئے جنت یا جہنم کا فیصلہ ہوجائے۔(مسلم، کتاب الزکاۃ)

اس آیت اور حدیث میں عمومی طور پر سونے یا چاندی پر زکاۃ کی عدم ادائیگی پر دردناک عذاب کی خبر دی گئی ہے خواہ وہ استعمالی زیور ہوں یا تجارتی سونا و چاندی۔ غرضیکہ قرآن کریم میں کسی ایک جگہ بھی استعمالی زیور کا استثنی نہیں کیا گیاہے۔ حضرت عبد اللہ بن عمرؓ سے روایت ہے کہ ایک عورت نبی اکرم صلی اللہ علیہ وسلم  کی خدمت میں حاضر ہوئی۔ اس کے ساتھ اسکی بیٹی تھی جو دو سونے کے بھاری کنگن پہنے ہوئے تھی۔ نبی اکرم ا نے اس عورت سے کہا کہ کیا تم اس کی زکاۃ ادا کرتی ہو؟ اس عورت نے کہا : نہیں۔ تو نبی اکرم صلی اللہ علیہ وسلم  نے فرمایا : کیا تم چاہتی ہو کہ اللہ تعالیٰ ان کی وجہ سے کل قیامت کے دن آگ کے کنگن تمہیں پہنائے۔ تو اس عورت نے وہ دونوں کنگن اتارکر نبی اکرم صلی اللہ علیہ وسلم  کی خدمت میں اللہ کے راستے میں خرچ کرنے کے لئے پیش کردئے۔ (ابو داؤد، کتاب الزکاۃ، باب الکنز ما ہو وزکاۃ الحلی۔ مسند احمد۔ ترمذی ۔ دار قطنی) شارح مسلم امام نووی ؒ نے اس حدیث کو صحیح قرار دیا ہے۔ حضرت عائشہؓ فرماتی ہیں کہ نبی اکرم ا میرے پاس تشریف لائے اور میرے ہاتھ میں چھلا دیکھ کر مجھ سے کہا کہ اے عائشہ! یہ کیا ہے؟ میں نے کہا : اے اللہ کے رسول ! یہ میں نے آپ کے لئے زینت حاصل کرنے کی غرض سے بنوایا ہے۔ تو نبی اکرم انے کہا : کیا تم اس کی زکاۃ ادا کرتی ہو؟ میں نے کہا : نہیں۔ نبی اکرم انے فرمایا : تو پھر یہ تمہیں جہنم میں لے جانے کے لئے کافی ہے۔ (ابوداؤد ۱/۲۴۴، دار قطنی) محدثین کی ایک جماعت نے اس حدیث کو صحیح قرار دیا ہے۔ امام خطابی ؒ نے (معالم السنن ۳/۱۷۶) میں ذکر کیا ہے کہ غالب گمان یہ ہے کہ چھلا تنہا نصاب کو نہیں پہونچتا، اس کے معنی یہ ہیں کہ اس چھلے کو دیگر زیورات میں شامل کیا جائے ، نصاب کو پہونچنے پر زکاۃ کی ادائیگی کرنی ہوگی۔ امام سفیان ثوری ؒ نے بھی یہی توجیہ ذکر کی ہے۔ حضرت اسماء بنت زید ؓ روایت کرتی ہیں کہ میں اور میری خالہ نبی اکرم صلی اللہ علیہ وسلم  کی خدمت میں حاضر ہوئیں، ہم نے سونے کے کنگن پہن رکھے تھے۔ تو نبی اکرم صلی اللہ علیہ وسلم  نے کہا : کیا تم اس کی زکاۃ ادا کرتی ہو؟ ہم نے کہا : نہیں۔ نبی اکرم صلی اللہ علیہ وسلم  نے فرمایا :کیا تم ڈرتی نہیں کہ کل قیامت کے دن اللہ تعالیٰ ان کی وجہ سے آگ کے کنگن تمہیں پہنائے؟ لہذا ان کی زکاۃ ادا کرو ۔ (مسند احمد) محدثین کی ایک جماعت نے حدیث کو اس صحیح قرار دیا ہے۔ متعدد احادیث صحیحہ میں زیورات پر زکاۃ کے واجب ہونے کا ذکر ہے، یہاں طوالت سے بچنے کے لئے صرف تین احادیث ذکر کی گئی ہیں۔ استعمالی زیور میں زکاۃ واجب نہ قرار دینے والا امت مسلمہ کا دوسرا مکتب فکر عموماً دو دلیلیں پیش کرتا ہے : عقلی دلیل: اللہ تعالیٰ نے اسی مال میں زکاۃ کو واجب قراردیا ہے جس میں بڑھوتری کی گنجائش ہو، جبکہ سونے اور چاندی کے زیورات میں بڑھوتری نہیں ہوتی۔ ۔۔ حالانکہ حقیقتاً زیورات میں بھی بڑھوتری ہوتی ہے چنانچہ سونے کی قیمت کے ساتھ زیورات کی قیمت میں بھی اضافہ ہوتا ہے، آج کل تو تجارت سے زیادہ  margin  سونے میں موجودہے۔ چند احادیث وآثار صحابہ : وہ سب کے سب ضعیف ہیں جیساکہ شیخ ناصر الدین البانی ؒ نے اپنی کتاب (ارواء الغلیل فی تخریج احادیث منابر السبیل) میں دلائل کے ساتھ تحریر کیا ہے۔ برصغیر کے جمہور علماء کرام نے قرآن وحدیث کی روشنی میں یہی تحریر کیا ہے کہ استعمالی زیورات میں نصاب کو پہنچنے پر زکاۃ واجب ہے۔ ۔۔۔ سعودی عرب کے سابق مفتی عام شیخ عبد العزیز بن بازؒ کی بھی قرآن وسنت کی روشنی میں یہی رائے ہے کہ استعمالی زیور پر زکاۃ واجب ہے۔ تفصیلات کے لئے انٹرنیٹ کے اس لنک پر کلک کیجئے۔ http://www.binbaz.org.sa/mat/13841

اصولی بات: موضوع بحث مسئلہ میں امت مسلمہ زمانۂ قدیم سے دو مکاتب فکر میں منقسم ہوگئی ہے، ہر مکتب فکر نے اپنے موقف کی تایید کے لئے احادیث نبویہ سے ضرور سہارا لیا ہے لیکن اس حقیقت کا کوئی انکار نہیں کرسکتا کہ قرآن کریم میں جہاں کہیں بھی سونے یا چاندی پر زکاۃ کی ادائیگی نہ کرنے پر سخت وعیدیں وارد ہوئی ہیں کسی ایک جگہ بھی استعمالی یا تجارتی سونے میں کوئی فرق نہیں کیا گیا ہے۔ نیز استعمالی زیور کو زکاۃ سے مستثنیٰ کرنے کے لئے کوئی غیر قابل نقد وجرح حدیث احادیث کے ذخیرہ میں نہیں ملتی ہے، بلکہ بعض احادیث صحیحہ استعمالی زیور پر زکاۃ واجب ہونے کی واضح طور پر رہنمائی کررہی ہیں۔ شیخ ناصر الدین البانی ؒ جیسے محدث نے بھی ان میں سے بعض احادیث کو صحیح تسلیم کیا ہے۔ نیز استعمالی زیور پر زکاۃ کے واجب قرار دینے کے لئے اگر کوئی حدیث نہ بھی ہو تو قرآن کریم کے عمومی حکم کی روشنی میں ہمیں ہر طرح کے سونے وچاندی پر زکاۃ ادا کرنی چاہئے خواہ اس کا تعلق استعمال سے ہو یا نہیں،تاکہ کل قیامت کے دن رسوائی،ذلت اور دردناک عذاب سے بچ سکیں۔ نیز استعمالی زیور پر زکاۃ کے واجب قرار دینے میں غریبوں،مسکینوں، یتیموں اور بیواؤں کا فائدہ ہے تاکہ دولت چند گھروں میں نہ سمٹے بلکہ ہم اپنے معاشرہ کو اس رقم سے بہتر بنانے میں مدد حاصل کریں۔ احتیاط: وہ مذکورہ بالا احادیث جن میں نبی اکرم انے استعمالی زیور پر بھی وجوب زکاۃ کا حکم دیا ہے ، ان کے صحیح ہونے پر محدثین کی ایک جماعت متفق ہے، البتہ بعض محدثین نے سند حدیث میں ضعف کا اقرار کیا ہے۔ لیکن احتیاط اسی میں ہے کہ ہم استعمالی زیور پر بھی زکاۃ کی ادائیگی کریں تاکہ زکاۃ کی ادائیگی نہ کرنے پر قرآن وحدیث میں جو سخت ترین وعیدیں وارد ہوئی ہیں ان سے ہماری حفاظت ہوسکے۔ نیز ہمارے مال میں پاکیزگی کے ساتھ اس میں نمو اور بڑھوتری اسی وقت پیدا ہوگی جب ہم مکمل زکاۃ کی ادائیگی کریں گے، کیونکہ زکاۃ کی مکمل ادائیگی نہ کرنے پر مال کی پاکیزگی اور بڑھوتری کا وعدہ نہیں ہے۔ نیز جو بعض صحابہ یا تابعین استعمالی زیور میں زکاۃ کے وجوب کے قائل نہیں تھے ، ان کی زندگیوں کے احوال پڑھنے سے معلوم ہوتا ہے کہ وہ تو اپنی ضروریات کے مقابلے میں دوسروں کی ضرورتوں کو پورا کرنے میں اپنی دنیا وآخرت کی کامیابی سمجھتے تھے اور اپنے مال کا ایک بڑا حصہ اللہ تعالیٰ کے راستے میں خرچ کرتے تھے۔ تاریخی کتابیں ایسے واقعات سے بھری ہوئی ہیں۔ اِس وقت امت مسلمہ کا بڑا طبقہ زکاۃ کی ادائیگی کے لئے بھی تیار نہیں ہے چہ جائیکہ دیگر صدقات وخیرات وتعاون سے اپنے غریب بھائیوں کی مدد کرے، لہذا استعمالی زیور پر زکاۃ نکالنے میں ہی احتیاط ہے تاکہ ہم دنیا میں غریبوں،یتیموں اور بیواؤں کی مدد کرکے کل قیامت کے دن نہ صرف عذاب سے بچ سکیں، بلکہ اجر عظیم کے بھی مستحق بنیں۔ چند وضاحتیں: اگر زیورات استعمال کے لئے نہیں ہیں بلکہ مستقبل میں کسی تنگ وقت میں کام آنے (مثلاً بیٹی کی شادی) کے لئے رکھے ہوئے ہیں یا سال سے زیادہ ہوگیا اور ان کا استعمال بھی نہیں ہوا، تو اس صورت میں سونے کے زیورات پر زکاۃ کے واجب ہونے پر تقریباً تمام علماء کرام کا اتفاق ہے، یعنی امت مسلمہ کا دوسرا مکتب فکر بھی متفق ہے۔ زیورات کی زکاۃ میں زکاۃ کی ادائیگی کے وقت پرانے سونے کے بیچنے کی قیمت کا اعتبار ہوگا۔ یعنی آپ کے پاس جو سونا موجود ہے اگر اس کو مارکیٹ میں بیچیں تو وہ کتنے میں فروخت ہوگا اس قیمت کے اعتبار سے زکاۃ ادا کرنی ہوگی۔ Diamond  پر زکاۃ واجب نہ ہونے پر امت مسلمہ متفق ہے، کیونکہ شریعت اسلامیہ نے اس کو قیمتی پتھروں میں شمار کیا ہے۔ ہاں اگریہ تجارت کی غرض کے لئے ہوں تو پھر نصاب کے برابر یا زیادہ ہونے کی صورت میں زکاۃ واجب ہوگی۔ اگر کسی شخص کے پاس سونے یا چاندی کے علاوہ نقدی یا بینک بیلینس بھی ہے تو ان پر بھی زکاۃ ادا کرنی ہوگی، البتہ دو بنیادی شرطیں ہیں  : ۱۔ نصاب کے مساوی یا زائد ہو۔ ۲۔ ایک سال گزر گیا ہو۔

• Zakat on gold or silver jewellery

Reader Interactions

Nauman Khan says

April 23, 2020 at 12:23 pm

Zeeshan Nasim commented on WhatsApp: “jazakAllah”

April 23, 2020 at 12:31 pm

Saima Akmal commented on WhatsApp: “Jazakallah Hu khair an kaseera”

May 16, 2020 at 1:39 pm

Bilal Muddassir commented on WhatsApp: “I am going through this video. I think I will calculate if gold is eligible + how much in bank I have maybe I will assume will pay before Eid and might include that also better to be safe.”

April 24, 2021 at 12:47 pm

Bilal Muddassir commented on WhatsApp: “I have to discuss zakat , When do you sleep tonight? , Let’s talk about this tomorrow”

April 25, 2021 at 11:16 am

Usman Arshad commented on WhatsApp: “Jazak Allah Khair”

April 25, 2021 at 11:18 am

Arfa Sultana commented on WhatsApp: “Thanks”

April 25, 2021 at 11:22 am

Jazib Khan commented on WhatsApp: “👍”

April 25, 2021 at 11:24 am

Sobia Ajmal commented on WhatsApp: “jazakum Allahu Khairan”

April 25, 2021 at 11:49 am

Saima Akmal commented on WhatsApp: “Jazakallah Hu khair an kaseera ”

April 25, 2021 at 12:28 pm

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• What Is Zakat?

How Zakat Works

Special considerations, zakat vs. nisab, the bottom line.

• Behavioral Economics

Zakat: The Basic Rules for One of the Five Pillars of Islam

Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle.

Investopedia / Laura Porter

What Does Zakat Mean?

Zakat is an Islamic finance term referring to the obligation that an individual has to donate a certain proportion of wealth each year to charitable causes. Zakat is mandatory for all Muslims in most countries and is considered to be a form of worship. Giving away money to the poor is said to purify yearly earnings that are over and above what is required to provide a person and their family with their essential needs.

Key Takeaways

• Zakat is a religious obligation for all Muslims who meet the necessary criteria to donate a certain portion of their wealth each year to charitable causes.
• It is said to purify yearly earnings that are over and above what is required to provide individuals and their families with their essential needs.
• Zakat is based on income and the value of possessions.
• The common minimum amount for those who qualify is 2.5% or 1/40 of a Muslim's total savings and wealth.
• No zakat is required when someone's personal wealth falls below the threshold during a lunar year,

There are Five Pillars of Islam: the declaration of faith, prayer, fasting during Ramadan, the Hajj pilgrimage, and zakat. Zakat is a compulsory procedure for Muslims who earn above a certain threshold. It should not be confused with Sadaqah , the act of voluntarily giving charitable gifts out of kindness or generosity.

Religious texts offer comprehensive descriptions of the minimum amount of zakat that should be distributed to those less fortunate. It generally varies, depending on whether wealth came from farm produce, cattle,  business activities , paper currency, or  precious metals like gold and silver.

Zakat is based on income and the value of possessions. The common minimum amount for those who qualify is 2.5% or 1/40 of a Muslim's total savings and wealth. 

The recipients of zakat are:

• The poor and needy
• Struggling Muslim converts
• Enslaved people
• Individuals in debt
• Soldiers fighting to protect the Muslim community
• Those stranded during their travels

The collectors of zakat are also compensated for the work they do.

Each year, between $200 billion and $1 trillion is spent on mandatory alms and voluntary charity across the Muslim world, according to Islamic financial analysts.

As one of the Five Pillars of Islam, zakat is a religious obligation for all Muslims who meet the necessary criteria of wealth. This rule plays a major role in the history of Islam and has led to disputes, notably during the Ridda wars.

Zakat is considered to be a mandatory type of tax , although not all Muslims abide. In many countries with large Muslim populations, individuals can choose whether or not to pay zakat.

That is not the case for countries such as Libya, Malaysia, Pakistan, Saudi Arabia, Sudan, and Yemen. Those who fail to pay zakat in places where it is compulsory are treated like tax evaders and warned that they will face God’s punishment on Judgment Day.

There has been considerable controversy and criticism surrounding zakat, though. Islamic scholars and development workers argue that it has failed to lift people out of poverty , prompting them to suggest that the funds are being wasted and mismanaged.

A personal residence doesn't count toward wealth and thus, doesn't count when calculating zakat. Property used to generate income, such as a rental or vacation home, does.

Nisab is a term that often appears alongside zakat. It is a threshold, referring to the minimum amount of wealth and possessions that a Muslim must own before being obligated to pay zakat. In other words, if personal wealth is below this minimum during one lunar year, no zakat is owed for that period. The nisab is set at the value of 87.48 grams of gold or 612.36 grams of silver.

Not everyone pays zakat at the same time. That's where nisab comes into play. Individuals become eligible to pay zakat once they reach the threshold during the full lunar year. So one individual may owe it earlier than someone else.

There is no set payment date for zakat. But it is often paid out at the end of the year once calculations on any leftover wealth are made. Some Muslims believe that paying zakat during Ramadan brings good fortune.

This requires that individuals take regular inventory of their possessions and wealth. This can be done either weekly or monthly.

What Is Zakat in Islam?

Zakat is an Islamic financial term. As one of the pillars of the faith, it requires all Muslims to donate a portion of their wealth to charity. Muslims must meet a certain threshold before they can qualify for zakat. The amount is 2.5% or 1/40 of an individual's total savings and wealth. Zakat can be paid at any time during the lunar year. Some Islamic countries require citizens to pay zakat while others do not.

How Do You Calculate Zakat?

Muslims should take inventory of their possessions and wealth. Once they reach nisab or the threshold, which is the value of 87.48 grams of gold or 612.36 grams of silver, they must pay zakat. The total amount to be paid is 2.5% or 1/40 of their total savings and wealth. Muslims can use any number of zakat calculators which are available online to determine their obligations.

What Are the Rules of Zakat?

Individuals must meet a certain threshold known as nisab in order to qualify for zakat every lunar year. This is set at the value of 87.48 grams of gold or 612.36 grams of silver. People whose wealth exceeds the value of these amounts must pay 2.5% of the value of their wealth in zakat. Individuals who do not meet this limit are not obligated to pay.

How Much Are Muslims Obligated to Pay in Zakat?

Muslims are obligated to pay 2.5% of the total value of their wealth less any liabilities in zakat provided they reach nisab. This is the threshold, which is the value of 87.48 grams of gold or 612.36 grams of silver. Some Muslim countries make zakat mandatory, just like taxes. Others, though do not obligate their citizens to do so.

Sharia is a set of religious laws that adherents of the Islamic faith follow. It dictates various facets of Muslim life, from rituals to raising a family to financial matters. Zakat is an Islamic financial term that obligates Muslims to donate a portion of their wealth to charitable causes. While the practice is mandatory in many Islamic nations, some countries don't obligate their citizens to do so. Whether obligatory or voluntary, using an online zakat calculator can help individuals determine just how much of their wealth they must donate each lunar year.

United Nations Development Programme. " Zakat for the SDGs ."

Elmaghrabi, Mahmoud, et al. "Towards Developing Standards for the Zakat Administration in the Republic of Sudan." International Journal of Management and Applied Research, vol. 7, no 2, 2020, pp. 136-146.

National Zakat Foundation. " Do I pay Zakat on my house? "

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What Is Zakat? – Meaning, Importance, Who Is Eligible, And Facts

There are five essential pillars in Islam which are shahada, salat, zakat, sawm, and hajj. It is the obligation on every Muslim to adhere to these five pillars and live life with purity in hearts. If searching for what is zakat, it is the third pillar of Islam that orders a person to do charity and give a portion of wealth to the poor and needy. It is a form of praying and leading the life on the path shown by Allah. Not all have to perform annual donation, but only those who are eligible can pay zakat as a religious obligation.

What is zakat: zakat meaning

Zakat literally means ‘to increase’, and technically it means ‘that which purifies’. Therefore, it is a basic tenet in Islam that purifies the earning of an individual in a year. It has to be donated on excess wealth including money in the bank account or at home, possession of gold/silver, agriculture produce, livestock earnings, and profits from stocks and investment. In turn, it liberates an individual from greed and selfishness. It is a way to be at peace and maintain harmony in society.

Importance of zakat

The importance of zakat in Quran is mentioned more than 80 times. It obliges an individual to be sincere in its proper calculation and donation. Their adherence to faith brings them closer to Allah, the only truth in the world. It is a highly significant factor in maintaining social order and removing beggary. Further, a balanced distribution of wealth among the rich and poor removes social evils like slavery, exploitation, and crime. The basic concept of annual donation is to promote brotherhood and Muslim unity worldwide in the name of Allah, the almighty.

Types of Zakat

1. Zakat al Mal: The most common type of Zakat, Zakat al Mal is the annual donation made on the the wealth of an individual. The wealth include money in cash, gold, silver and property.

2. Zakat al Fitr: Another significant donation that is obligatory for Muslims is Zakat al Fitr. The donation is made before the Eid in the fixed time limit for making it valid.

Must Read:   The Necessary Donation Of Zakat Al Fitr On Eid Al Fitr

Zakat hadith

Charity acts as an investment with greater profits than any other system. Allah mentions the virtues of the profits in a hadith narrated Abu Huraira:

“If one gives in charity what equals (the size of) one date-fruit from the honestly-earned money and Allah accepts only the honestly earned money –Allah takes it in His right (hand) and then enlarges its reward for that person (who has given it), as anyone of you brings up his baby horse, so much so that it becomes as big as a mountain.”

– Sahih Bukhari, Vol 2, Book 24, No. 491

Benefits of zakat

Charity in the name of Allah has many impacts and benefits for an individual doing it and the society they live in. Some of these are:

• Unification in the cause of Allah: As mentioned in a hadith, an Angel prays Allah to provide for the person who donates for the divine cause. Donation makes the two ends meet that are a path led by an individual and the one shown by Allah.
• Protection from hellfire: Allah loves those who are righteous and obey Him with complete faith. Islamic scholars suggest that a person remains safe from hellfire, and Allah provides a home on the Judgment day who donates wealth on time.
• Promote belongingness in a society: Donation lays the foundation for balanced wealth distribution and uplifts the poor and needy. Hence, it removes the social difference between rich and poor and makes every individual, as Allah made them, equal to each other.

Zakat Rules

The annual donation has several basic rules that every Muslim must be aware of. Therefore, here are the essential rules to pay the annual donation:

Who is eligible for zakat?

An individual has to donate wealth as a responsibility if their annual income increases the minimum amount. The individual will have to donate their wealth every year from that day on. The charity should not be delayed as it is an obligation on the individual. Additionally, Zakat al-Fitr is to be paid by the head of the family at the end of Ramadan. One has to give Zakat al-Fitr for every fasting member of the family in terms of money or food, which equals the amount of one-day fasting of the member.

Suggested Read: Dos And Don’ts Of Ramadan: A Complete Etiquette Guide

Who is eligible to give zakat?

The donation is due whenever a person’s wealth becomes more than the nisab.

Nisab Meaning

The minimum amount of an individual’s wealth at which they are eligible to pay Zakat. The different sources and assets of wealth have different calculations for the total nisab. Also, if the wealth of an individual drops below the nisab at any time in the zakat year, the calculation of the year will restart once the wealth becomes more than nisab.

Who is eligible to receive zakat?

There are eight categories of people who can receive the donated wealth. These are:

• Fakir – poor and needy
• Miskin – hungry and have nothing to eat
• Amil – zakat collector who distributes it on behalf of others
• Riqab – enslaved people or captives
• Gharmin – people in debt
• Fisabilillah – individuals who work towards the cause of Allah
• Ibnus Sabil – stranded travelers
• Muallaf – new members or converts

How to calculate Zakat

To calculate it, one needs to know the Zakatable income first. Muslims can calculate their total income by adding all the sources of income such as gold and silver, cash, stocks, shares, property, etc. Now, one must calculate their needs and living expenses of the year. The expenses now will have to be subtracted from the total income resulting in the total Zakatable amount. If the amount is above the threshold or nisab, the Zakatable wealth is then multiplied by the Zakat percentage to find the yearly donation of the individual. However, one will not have to pay the donation if the Zakatable amount is lesser than nisab.

How to calculate zakat on salary

Zakat on salary is not calculated on how much one earns but how much they are able to save as wealth. Therefore, one should calculate zakat on their saving from the salary. If the savings is over nisab, one will have to pay the donation. In case, the salary of an individual is not constant one can calculate the total amount saved over the year and pay the obligatory donation accordingly.

Zakat facts

• Only the person who holds wealth for complete year are eligible to donate
• It is the right of every poor to receive as ordered by Allah
• It’s main intention is to make the poor self-reliant and provide equal status next to the rich
• When talking about the five pillars of Islam, it is second only to five daily prayers
• All the calculations have to be done in a specified manner and not as per individual’s will
• People should prioritize neighborhoods for charity

Must Read: Five Pillars Of Islam: The Fundamental Islamic Beliefs For All

To simplify the concept and relevance of Zakat, it is an obligation on Muslims to preserve the poor against the evil of greed and riches. It is a way to maintain balance and order in society by eliminating immoral and sinful acts and replacing them with goodness and truth. Pay obligatory donation as per your ability and make your contribution to restoring prosperity to Ummah.

Can an individual give zakat to family members?

Yes, one can donate wealth to family members if the member falls in the receiving criteria.

What is nisab?

The threshold of wealth above which one has to pay obligatory donation is nisab.

What is Zakat al-Fitr?

It is the charity done at the end of Ramadan on behalf of fasting family members by the head of the family. It is an additional charity separate from annual donation.

What are the benefits of zakat?

It helps in establishing balance in the society and bringing an individual close to Allah.

How does zakat work?

It is different from general charity. For donation to work, the sole intention or niyat should be to pay zakat alone.

Zakat is given in which month?

People can donate in any month of the year but should maintain the date to give the next donation on the same date in the following year.

Can zakat be given to siblings?

Yes, one can pay it to siblings in need.

Can you pay zakat on behalf of someone else?

Yes, head of the family can pay the donation on behalf of other family members.

Do I need to pay zakat on land?

Yes, one will have to pay donation on land if it is generating or adding to the wealth of the individual.

Can zakat be given to masjid?

Most of the scholars do not promote the idea of giving obligatory donation to mosques. However, there are some scholars who suggest that individuals can donate it to mosques.

Dr Omar Ayoub

Dr. Omar Ayoub is a tech enthusiast and a part time researcher and accounts authorship of several international publications. He holds a PhD in Computer Science from USA and has an experience of more than 10 years in Saudi Arabia working in tourism, hospitality, education, technology and retail sector. His interests include traveling, writing, and exploring trending technologies.

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Why Teach The Concept Of Zakat To Kids?

• November 11, 2021

Zakat is a pillar of Islam and whoever ignores it is considered a sinner. That’s why we should teach the concept of Zakat for kids once they reach a certain age when they can comprehend it.

Keep reading to know more basic answers about Zakah and Sadaqah that you can discuss with your child.

What Is Zakat

Zakat is a sort of almsgiving to the Muslim Ummah, male or female, that is perceived as a religious requirement in Islam. In the Quran, zakat takes place after Salah, implying that it is second only to prayer (salah) in importance .

“Establish regular prayer and give Zakata, and obey Allah and His messenger.”

(Surah Al-Ahzab)  

Zakat is a term that means “purification.” As a result, in Islam, zakata encourages Muslims to purify their wealth. According to Islam, those who pay zakata will be rewarded in the hereafter by Allah SWT, but those who do not pay zakata will be condemned.

Benefits of Zakata and Sadaqah

Allah SWT richly rewards those who pay zakat for the sake of Allah. According to Abu Huraira (May Allah Be Pleased With Him), Prophet Muhammad (Peace Be Upon Him) said:

“There is not a day upon which the servant awakens but that two angels descend. One of them says: O Allah, repay one who spends in charity! The other says: O Allah, destroy one who withholds charity!”

(Sahih Bukhari and Muslim)

According to another hadith, refusing to pay zakata or insulting those who do is evidence of hypocrisy, and Allah would not approve of such people’s prayers.

The sunnah also describes Allah’s punishment for those who reject or fail to pay zakata. On the Day of Resurrection (Yawm Al Qiyamah), those who did not pay the zakat will be held accountable and punished.

zakata also has a variety of non-religious advantages. The Almighty has promised to enhance the giver’s wealth as well as to provide him inner peace and pleasure. It is also stated to purify yearly earnings that are greater than what is required to fulfill the fundamental needs.

Zakat has far-reaching consequences for both the giver and the recipient. It helps the needy become financially stable, which in turn contributes to the general stability and prosperity of our community.

Why Should You Teach The Concept of Zakat to Kids?

Your children should learn about Zakat so that they can follow its rules and pass them down 

Sign up for Noor Academy ‘s online kids’ classes ! It’s perfect if you want your children to learn about zakat and sadaqah and   other Islamic pillars via entertaining activities.

You can teach your children the Islamic foundation in exciting, engaging ways that will motivate them to learn more.

Purchase Islamic books on Zakah for them, allow them to view video tutorials with intriguing animations that clarify the fundamentals of Islam’s pillars,

and engage them in fun activities to test their understanding.

Noor Academy’s (  house of Quran  ) Quran classes . The systematic structure of the Quran is a good option so you fully grasp it.

The class will cover the pronunciation, meaning, summary, and Tafsir of the Surah.

You can find another  online Quran for children   courses such as Quran recitation,  Tajweed ,  Quran with Tafseer , memorization, and Ijazah.

All the courses are accredited to ensure that your kids are learning  Quran online  for children from a credible source.

Who Is Eligible for Zakat?

Allah SWT has identified the sorts of individuals who are eligible for zakat money . Any money donated to any other type is not zakata.

So, who is eligible for Zakat?

The people eligible for zakata are 8 recipients of zakat:- 

• The poor, meaning low-income or indigent.
• The needy, meaning someone who is in difficulty.
• collectors of Zakat, meaning someone who is Zakat administrators
• new Muslims, meaning Those whose hearts are to be reconciled and friends of the Muslim community
• slaves and captives,
• debt-ridden,
• those who are stuck or traveling with little resources,
• and those who fight for the cause of Allah SWT.

“Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler – an obligation [imposed] by Allah. And Allah is Knowing and Wise.”

(Surah At-Tawbah)

It is important to note that zakat is not the type of charity gift that you give to the poor out of pity. zakata is a right of the underprivileged. When helping the needy, you should do so with decency and respect. Never allow pride to enter your heart; else, the rewards of your good actions will be reduced.

Can a Mother Give Zakat to Her Son? 

No, a mother can’t give zakata to her son. Zakata should not be donated to one’s immediate family in order for it to be legitimate. Your zakata cannot be received by your spouse, children, parents, or grandparents. The receiver must be underprivileged and eligible for zakata .

A poor individual has a property that surpasses their basic needs but does not surpass the Nisab level. It should be noted that Zakat can be donated to family members if they meet one of the eligibility conditions of recipients of zakata. However, not to immediate relatives.

How Many Types of Zakat in Islam?

There are two forms of Zakat in Islam. Adult Muslims are required to pay two types of zakata: Al-Mal and Al-Fitr. The first is Zakat on Wealth. The second is Zakat on Fast-Breaking, which is paid at the end of the fasting month of Ramadan .

What Is Zakat al-Mal?

Most Muslims refer to Zakat Al-Mal simply as “Zakat.” Zakat is the annual tax that Muslims are expected to pay on their wealth, which includes money, gold, silver, and property. It takes into account your overall net worth (total wealth).

What Is Zakat al Fitr?

zakat al Fitr is known as the zakata of Breaking the Fast of Ramadan is a particular obligatory donation paid by all Muslims. Muslims pay zakat al Fitr at the end of the Islamic calendar’s holy month of Ramadan.

It is also known as Sadaqat al-Fitr , or “ the Donation of Breaking the Fast ” of Ramadan, and Zakat al-Fitrah, or “the Charity of Human Nature.” Since it is an obligatory charity, it must be paid by every Muslim at the conclusion of Ramadan, regardless of age or gender.

This obligatory payment is known as Fitrah. This is derived from the Arabic term Fitr, which refers to the “nature” upon which Allah SWT created the human being. It is also related to the Arabic word for “fast-breaking” (iftar), which is eating after a period of abstention from this “natural” and defining human activity.

A Muslim’s Zakat Al-Fitr payment is equal to the cost of a meal. It’s given out on behalf of every member of the family. It is important to note that Zakat Al-Fitr must be conveyed to the needy, even if it is in another country, in order to reach the most deserving receivers on the day of Eid.

How Much zakata to Pay?

So, how much zakat to pay? The amount of Zakat to pay is determined by one’s income and the value of one’s assets. The usual qualifying amount is 2.5 percent of a Muslim’s total savings and fortune. Or 1/40 of his or her total savings and wealth .

Some people may be perplexed as to how to calculate Zakat . As a general guideline, you should calculate all of your goods and pay al Zakat equal to 2.5 percent or 1/40 of the value of your entire holdings that exceed Nisab for roughly a year.

This includes:

• Value of gold and silver you possess
• Cash at home and in bank accounts
• Other savings 
• Other outgoings due
• Money owed to you 
• The money you owe 
• Stock value
• al Zakat on installment property 
• Investment and share values

Other things should be taken into account. Such as your money could include money you inherited, so you should pay zakata on inheritance. Your possession could also include the living animals you take care of. So you might find yourself paying al Zakah on goats you keep!

Note : Nisab varies from country to country and year to year. Make sure to ask your local mosque.

Everyone whose wealth reaches or exceeds a certain level known as the Nisab is obligated to pay zakat . In contrast to taxes, zakah is an act of worship for which one receives a reward from Allah SWT.

Can I Pay zakata to Mosque?

So, can I pay zakata to the mosque? It depends. If you’re paying al Zakata to construct and modify a mosque, then no, you can’t pay zakah to a mosque. However, if the mosque is just a medium that will take your money and deliver it to people eligible for al Zakat, then yes, you can pay zakat to a mosque .

The Quran identifies eight distinct groups of “people” who are eligible for zakat payments, to the exclusion of all other individuals and all other types of need.

Mosques that are not owned by any single individual do not fall under Zakah’s divinely defined boundaries. As a result, mosques are not eligible for zakah.

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ZAKAT IN ISLAM

Aug 21, 2014

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ZAKAT IN ISLAM. AN OVERVIEW OF ZAKAT SYSTEM IN MALAYSIA. Presentation outline. Various types of zakat Illustration to calculate zakat Comparison between zakat and taxation. ZAKAT. Types of Zakat. 1. Zakat fitrah ( al- fitr ) a flat fee or levy imposed on each person.

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ZAKAT IN ISLAM AN OVERVIEW OF ZAKAT SYSTEM IN MALAYSIA

Presentation outline • Various types of zakat • Illustration to calculate zakat • Comparison between zakat and taxation

Types of Zakat 1. Zakatfitrah (al-fitr) • a flat fee or levy imposed on each person. • due from the starting of Ramadhan and ends before the eid’ fitr prayer. 2. Zakat from earnings (al-mal) – a religious levy on wealth. • Traditional types of wealth subject to zakat • Agricultural produce, reared animals, business, gold and silver. • New types of wealth subject to zakat • Various forms of wealth based on the consensus of Islamic scholars and jurists e.g. employment income, professional income

Zakat Al Fitr / Zakat Fitrah • To contribute a certain amount of staple food or pay an equivalent monetary amount in the month of Ramadan before the Muslim festive celebration or Eid al Fitr (Ariff, 1991). • The zakat al-fitr flat fee is one sa` – a little more than two kilograms of wheat, barley, dates, or rice – or the monetary equivalent (Al Qardawi, 1997).

Zakat Al Fitr / ZakatFitrah / Zakat on Self • Compulsory on every Muslim • Not subjected to nisab or haul • The rate between RM4 - RM5 per person • Payable from the first day of Ramadhan until before the Aidil Fitri prayer. • The best is on the eve of Shawal

ZAKAT FITRAH - Example • Can be paid in the form of staple food; rice, or in the form of money. • For example: 1430H/2009, the rates were: • 2.268 kg (nisab / kadar) • RM2.84 (according to the value of fragrant rice) • RM1.93 (according to the value of Thai rice) • Zakatbaginegeri-negeridi Malaysia bagitahun2009 (kecuali Kelantan), mengikuttahapkehidupansetiapnegeri: • Selangor, Wilayah Persekutuan, Pahang, Perak, Kedah danPulau Pinang – RM7 • Terengganu – RM5, RM7 dan RM8 • Johor – RM5 dan RM7.50 • Sabah – RM6.60 • Negeri Sembilan – RM6.50 • Melaka – RM6.30 • Sarawak dan Perlis – RM6 *Kadar zakatditentukanolehMajlis Agama Negeri

Zakat on Wealth / Al- Mal • Incomerefers to earnings from salary, dividends or other receivables income from services or consultation. • Salary include annual, deferred (tunggakan), allowance, commission, bonuses, consultation fees.

ZAKAT ON WEALTH / Al- Mal • Depends on the amount of wealth that you have and how long (haul) you had it for. • Your wealth has to reached it’s nisab(the minimum amount upon which Zakatis payable) and reached it’s haul (one lunar year) • Zakat al-mal or zakat from earningsis levied only on Muslims whose wealth exceeds a threshold called nisab (Kahf, 2005).

Zakat Rate • The minimum threshold (nisab) of zakat on savings or investments is 85 grams of gold / worth. • The rate of zakat is 2.5%; as for livestock, both the minimum threshold and the rate depend on the type and the number of animals.

Ways to calculate zakat Method 1 • 2.5 % on the total annual gross income ( if the total income is more than the nisab rate). • Example : • The total annual gross income is RM33,800.00. • The zakat is RM33,800.00 x 2.5 % = RM845.00 Method 2 • Zakat is paid after deducting all allowable basic expenses. Method 3 •  Zakat is paid after deducting all the liabilities.

Calculation of zakat 1. Urfiiyah Method ( Capital Growth ) • Current capital = Owner’s Equity + Debt Financial Capital + Profit – Fixed Asset – Other Non Current Assets. 2.Syar’iiyah Method ( Working capital) • Net Current Asset = Current Asset (full ownership) – Current Operating Liability only.

Types of Zakat on Wealth (Al-Mal) • Zakat on Business Income • Zakat on Employment Income • Zakat on Saving • Zakat on Shares • Zakat on Gold • Zakat on EPF • Zakat on Crops • Zakat on Livestock • Illustration on the calculations

Zakat on Business Income • Growth method • Capital + Long Term Liabilities – Fixed assets- Investment • The results is multiply by 2.5percent • Working capital method • Current assets – current liabilities • The results multiply by 2.5 percent

Zakat in business • Hadith from Rasulullahs.a.w as narrated by Abu Daud: “ …indeed, Rasulullahs.a.w asked us to pay zakatfrom the property that we prepare to sell” • All kind of businesses owned by Muslims are subject to zakat.

Conditions to fulfill to pay zakat on business • The conditions that must be fulfilled to be subject to zakat :- • Muslim • A freedom person • The wealth must be from halal sources • Those activities prohibited against Islam cannot be included in zakat calculation

Continue……...Conditions to fulfill to pay zakat on business • Meet the nisab at the end of haul. • The nisab is 2.5% or equivalent to 85 grams of gold • Meet the haul. • Must be from productive property • E.g cash, shares, bond, ending inventory, fixed assets (movable or immovable), net trade receivable • Full ownership

Continue……...Conditions to fulfill to pay zakat on business • The business sources including donation are subject to zakat • Exist the intention to be in business • The intention • The transaction • The business property is not withdrawn for personal use

Basic items in a business – Not subject to zakat. • Fixed assets (bangunan, mesin, danalatalat lain) • Income accrued from productive fixed asset is subject to zakat • Current assets • Based on the value of assets provided in the Balance sheet or assessment on the inventory. • Zakat is based on the equivalent value of the assets • Zakat is imposed on accounts receivable if it is assured that the debtor will pay back • Zakat will only be imposed in the year when the debt is collected

Basic items in a business (cont..) • Intangible assets • E.g. Shares, patent, goodwill, bond, certificate of investment are considered equivalent to fixed assets if they are not traded but held in the purpose to gain dividend. • If the company invested in has already paid zakat, thus the income is no longer subject to zakat • Long term liability • Long term liabillity to finance/ run the business is subject to zakat • Capital and Shareholders’ fund • E.g. Paid up capital, premium accounts, accrued profit are subject to zakat.

Types of calculating zakat on business: • Growth Model • Owner’s equity + Long term liability – fixed assets – intangible assets +/- adjustments • Working Capital Model • Current assets – current liability +/- adjustments

Adjustments to be made to the calculation of zakat DEDUCTION • income which are not subject to zakat such as prohibited sources • amount are not wholly owned such as deposits for utilities • Creditors • Sources that zakathas already been paid • Current assets must be productive, thus bad debts, obselete stock, depreciation are deducted

Adjustments to be made to the calculation of zakat (cont..) DEDUCTION • Charity fund such as tabungkhairat, education fund • Charity fund which has the concept of rolling fund is not subject to zakat on the principal amount only. • Ending inventory • Those liabilities related to the business operation e.g. trade creditors, payables.

Adjustments to be made to the calculation of zakat (cont..) • Add to current assets • All gift, donations paid by the company • Add to current liability • Not related to business operation e.g. restructuring of debt • Dividend payable • Overdraft • Financial lease

Zakat on Employment Income • Based on gross income • 2.5 percent from the total net employment income • Based on net income • Deduction allowed • for personal expenses RM8000 • for wife RM3000 per person • for children RM1000 per person • Gift/ allowances to parents- actual amount • KWSP -11percent per annum • Contribution to organisation that pay zakat – Tabung Haji, Takaful

Zakat on Saving • It is calculated based on the lowest balance in the saving accounts • In case of more than one saving account, the total amount of the lowest balance need to be accounted • Zakat is payable only if the balance is more than RM6200 • Saving accounts in TabungHaji is excluded

Zakat on Saving • A) Zakat from saving deposit. • Cash deposit in bank is zakatable. The nisab for cash money is based on the nisab for gold i.e. 20 mithqal (85 gram) or silver (595 gram). The minimum amount payable for 1410H/2009 is $6,200.00, upon which 2.5% of Zakatis taxable • Islamic calendar (354 Days)= 2.5% • Normal calendar (365 Days) = 2.577% • Changes according to price of 21K gold in the market

HOW TO CALCULATE • Say in 2008, minimum limit = $6,200 (from 1.1.08 to 31.12.08) • Take minimum amount in account = $13,000. Why? • Hence zakat = 2.577% x $13,000 = $335.01

Zakat on Shares • Listed companies (from Syariah Councils) • Shares owned at the end of haul period • 2.5 percent on the lowest market price of the share • Shares traded during the haul period • 2.5 percent on the net profit (capital gain) • Non-listed companies (from Syariah Councils) • Difficulties to determine the market value • Zakat is calculated based on the dividend received

Zakat on Shares The shares that invested in the company is usually paid in cash. Zakat rate is 2.5% for the lowest value of shares. The shares must be held by the shareholders for one year and exclude any loan for purchasing the shares (if any).

THE CALCULATIONS • Example 1:Sharesowned at the end of one full year. Zakat rate is 2.5 % on the lowest cost and the market value. • 200,000 units of shares in (Halal stocks listed in Syariah Index) x RM 1.00 (the lowest price) = RM 200,000 • The zakat is: RM 200,000 x 2.5% = RM5,000. • Example 2: Shares purchases within a year. The zakat is calculated based on 2.5 % on the value of shares after deducting the cost of purchasing new shares. • The value of shares – the cost of purchasing new shares • RM500,000 - RM400,000 = RM100,000 • The zakat is: RM100,000 x 2.5 % =RM2,500

Zakat on Gold and Silver (Jewellery) Zakat from gold and silver The gold and silver are zakatable if they fulfill the nisab rate and one year ownership (haul). • Unused gold • Satisfied haul and nisabof 85 gram • Value of gold as at 20/3/07 is RM71.34/gram • The rate is 2.5 percent • Used by the owner • Not subject to zakat

Zakat on EPF • Non- absolute ownership method • Zakat paid when the contributor received the money upon retirement • The rate is 2.5 percent • Absolute ownership method • Based on nisab and haul • Similar to zakat on saving • Payable every applicable year regardless the actual money not received by contributors

Zakat on Crops / Agriculture • Zakat on agriculture to owner the staple foods of the particular countries which fulfill the nisaband haul. • Zakatable grains are paddy, dates, corn, wheat etc. • The nisabis 5 ausuk or equivalent to 363 gantang /1000kg in Malaysia. • The haul is equivalent to one full year ownership. The grains or fruits must be planted by the farmers. • The farmers need to pay the 5% zakat rate on agriculture after grains have been harvested.

Zakat on Crops / Agriculture • Edible crops (processed rice, ripe fruits, etc) • For rice, 10 percent without irrigation (pengairan semulajadi – no cost) and 5 percent with irrigation (tiada pengairan semulajadi – with cost) • May be paid at the time of harvest if satisfy haul and nisab • The nisab is 1000kg • Other crops based on RM6200 for the nisab – Business income

LIVESTOCKS Zakat from livestocks • The livestocks are zakatable when the owners have fulfilled the conditions for nisab and haul. • Zakatable livestocks are sheeps, cows, buffaloes and camels. • These livestocks must be healthy, not criple and must not be used to work in the paddy field or carry the goods.

Zakat on Livestock • Depend on the type of animal • 30 cows (nisab) – a calf (kadar) • 40 cows - a cow • 60 cows – two calves • 70 cows – a cow and a calf • 40 – 79 goats – a goat • 80 – 119 goats – two goats

Zakat on Livestocks • *For every 30 buffaloes, the zakat rate is I male buffalo, aged 1 year or more. • For every 40 buffaloes, the zakat rate is 1 female buffalo, aged 2 years or more. • ** If there are mixed female and male, the owner can choose any buffalo or cow to be paid as zakat.

EXEMPTION Certain conditions that assets can be exempted from zakat are: • Non productive fixed asset, • Non current asset, • Asset which are not fully owned by the owner, • Current operating liability, • Fund for charity, • Net receivables after zakat deduction, and • Any receivables from HARAM sources.

THE MEANING BEHIND ZAKAT • Affects three areas: • Morale • Economy • Social Surroundings • Protection for the Hereafter • Wealth do not belong to us • “The More You Give, The More You Receive”

Benefits of zakat • Zakat implies a deep humanitarian and social-political value such as free society from class warfare, distrust and corruption. • Zakat will balance the socio economy in the country and encourage the rich to help the poor continuously. • Zakat is the backbone of Muslim nation's financial system that keeps money in circulation. • Zakat also discourages hoarding and protect the muslims from many other vices, as love of wealth is the root of many immoral actions.

Benefits of zakat • The practice of zakat will produce more loving, caring and helping society in the future. • Zakat payment will lead to growth and development of all human beings and remove the poor-due in the long term. • Zakat may also improve all human beings faith and spiritual progress.

Dalil (Sources)Benefits of zakat • "Who is he that will lend to Allah a goodly loan, then (Allah) will increase it manifold to his credit (in repaying), and he will have (besides) a good reward (i.e. paradise)." [Surah Al Hadiid:11] • “Verily (Ketahuilah), those who give Sadaqah (i.e. Zakat and alms, etc.), men and women, and lend to Allah a goodly loan, it shall be increased manifold (to their credit), and theirs shall be an honourable good reward (i.e. paradise).” [Surah Al-Hadiid :18]

Dalil (Sources)Benefits of zakat • If you lend to Allah a goodly loan (i.e. spend in Allah's Cause) He will double it for you, and will forgive you. And Allah is Most Ready to appreciate and to reward, Most Forbearing." [Surah Ath-Thalaaq:17]

ZAKAT IN THE QURAN 30 places in the Quran stressing the importance of Zakat:- “… And Allah said: “I am with you if you perform Prayerand give Zakatand believe in My Messengers: honour and assist them, and lend a good loan to Allah, verily, I will expiate your sins and admit you to Gardens under which rivers flow (in Paradise). But if any of you after this, disbelieved, he has indeed gone astray from the Straight Path.” (Al-Maidah: 12)

IN THE RED From an Islamic perspective, being in debt is not encouraged: • Greatest sin is to die in a state of debt & no asset to pay it off • Conventional loans – interest bearing and can increase the burden of the person! • However, Islam encourages us to help one another…

FINANCING • … hence under Islamic Banking = Financing! • Profit rate again replaces interest rate • So why is the profit rate under Islamic financing usually higher than the interest rate for a conventional loan?

FINANCING • Under Islamic financing, the customer is not usually penalized for late payment • Under the “Reducing Balance” concept, if you settle your loan before the maturity of the period, you do not have to pay the profit due to the bank for the remaining years • Financing restructure depends on the financial capability of the client

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Zakat in Business

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