Rulings of Zakat 

 

What is Zakat?
Zakat is generally defined as the portion of a one's wealth, which is designated for the poor. 
   
Zakat is derived from the Arabic root "Zaka" which means "to grow", "to purify", and "to bless'.

 

Accordingly, the act of giving zakat means purifying one's wealth to gain God's blessing in order to grow in righteousness.
  

 

Wisdom behind Zakat


 Moslems who are blessed materially see their wealth as trust from God to whom it truly belongs, and therefore they fulfill the goal towards social justice.

 "Who is he that will loan to Allah a beautiful loan, which Allah will double unto his credit and multiply many times? It is Allah who giveth (you) want or plenty. And to him you shall return". (Quran - al-Baqarah 2: 245)

Zakat makes Islam the first welfare system in history that redistributes part of the wealth of the rich among the poor as a mean to achieve social justice.

 

Zakat is a purification of one's own property and one's own heart from selfishness, greed and ambivalence towards the suffering of others.

 

Zakat also purifies the heart of the recipient from jealousy and hatred
toward those who are wealthy in the material sense.

Zakat is an essential element in attaining mutual love, cooperation, and solidarity among members of Moslem society. 

 If Zakat money is well managed and distributed it would insure eradication of poverty and its related economical, social, and moral problems. 

 

 


Significance of Zakat
 

Zakat is the third pillar of Islam and it is an obligatory payment made to those Muslims who are in financial need. The word Zakat is tied to Salah (prayer) over 80 times in the Quran.

 

"Lo! Those who believe and do good deeds and establish Salah and pay Zakat, their reward is with their Lord; and no fear shall come upon them, nor shall they grieve" ( Quran - al-Baqarah - 2:277)

 

 

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The Nisaab
  The Nisaab is defined as the minimum wealth that one must hold for one year, at the end of which Zakat is payable.
  The amount of Nisaab varies according the type of wealth. 
In regard to gold, silver, and currencies Prophet Mohammad (pbuh) stated that the Nisaab amount is equivalent to 85 grams of pure gold.

At the present time the Nisaab is estimated as the equivalent amount of 85 grams of pure gold in any other currency. 

 

 

Currently Nisaab is equivalent to k.d 340, £740, or US $1,150.
 

The person is considered rich if he possesses the Nisaab in excess of his essential needs or those of his family with regard to food, drink, clothing, housing, animals, tools of his trade, and similar other necessities

. Whoever reaches Nisaab in excess of his essential needs, and remains in possession of it for one year, is liable to pay Zakat.

 

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 Zakatable Assets
 

Islam enjoins zakat on gold, silver, money, merchandise, crops, fruit, livestock, merchandise, and minerals.Here are some remarks regarding the most common categories of zakatable assets:

1)  Gold and Silver and Jewelers

i)  The Nisaab of gold is three ounces or about 85 grams of pure gold and of silver is 595 grams of pure silver.

ii)  Gold and silver in any shape or form are zakatable if they are bought as investment even if they are not allowable to use.

iii) Jewelers that are not made of gold or silver are not zakatable. 

vi)  In Hanafi fiqh, jewelry of everyday use are Zakatable if they reach the Nisaab.

v) In other fiqh schools jewelry of everyday use are Zakatable only if they reach the Nisaab and are bought as an investment.

2)  Money Currencies

i)   Currencies are regarded as Gold. The Nisaab in any currency is the amount equivalent of 85 grams of pure gold.

ii)  Cash in hand, or on loan to others in any currency, in your bank and building society accounts, and the release value of bonds, securities and shares are all zakatable.

3)  Properties

i)   The family home or household furniture, carpets, car, etc are not included within zakatable items.

ii)  But if a property is bought as an investment, Zakat is payable on the full current value. Any rental income which is saved is also subject to Zakat

iii)  If a property is let, Zakat is only payable on the rental income saved over a year.

vi)  A mortgage is not a deductible debt as it is not an immediate debt.

5)  Business

i)   If you own a shop, for example, there is no zakat on building, fixtures, fittings or vehicles used for trade.


ii)  The working capital of a business and traded goods including current inventory are zakatable after debts are paid. Profits become zakatable if saved for a year.


iii)   Zakat is not payable on certain capital investment such as building, furniture, equipment, which is not traded as part of the business.


6)  Household Items

Items of everyday use which are not meant for trade, such as household utensil, clothes, furniture, articles of adornment other than gold and silver, cars, tools and machinery used for further production, and animals used in agriculture are not Zakatable.

7)  Different types of wealth

i)  The person who owns different types of wealth such as animals, commercial goods and gold and silver must give Zakat on each type of wealth separately.

ii)  If these different types of wealth do not constitute the prescribed Nisaab separately, they will not be Zakatable even though they may constitute Nisaab when added together.

iii)  Zakat must be given in in kind, that is, if one's wealth is in cattle, one must pay in cattle rather than in money though this principle is not rigorously followed in Islam.

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Other types of Zakat

 

Zakat on Mines and Treasures

  • 20% of mines and treasure-trove, whether owned by the individuals or the state, is to be paid to the Zakat fund.
     

  • Zakat on Mines and Treasures is paid only once at the time of its extraction from the earth.
       

Zakat on Agricultural Produce

God has made Zakat obligatory on agricultural products and fruit. Almighty God says in Quran,

  • "Eat of its fruit when it bears fruit, and pay the due of it on the day of harvest"  (Quran - Surah al-An'am - 6:142)
     

  • "0 you who believe, spend of the good things that you earn and of that which We bring forth for you out of the earth" (Quran - Surah al-Baqrah 2:267).


 Are all kinds of agricultural produce Zakatable ?

  • According to Imam Abu Hanifa, Zakat on the agricultural produce is a compulsory levy on every kind of produce.
     

  • But according to others it is compulsory only on those things which can be stored for food such as grains, dates, and raisins. Therefore, Zakat is not charged on vegetables and similar produce.


How much of agricultural produce must be given as Zakat ?

The Zakat levy on the agricultural produce varies according to the way the land is irrigated.

  • The Zakat is 10% of the land produce if the land is irrigated by streams, rivers 
    (running water) or rainfall (without human effort).
     

  • The Zakat is 5% of the land produce if the land is irrigated by wells (or by artificial canal systems)

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Zakat on Livestock
 

The only categories of Livestock which are subject to Zakat are as enumerated below:

Type of animal

Nisaab

Camels

5

Sheep and goats

40

Cows, bulls, Oxen and buffaloes

30

 

In order for these categories of Livestock to be Zakatable the following conditions must be satisfied:

      1. The animals concerned must attain a Nisaab.
       

      2. They have to be in possession for one year.
       

      3. They should have pastured by themselves; that is, grazing most of the year in the available pasture (for at least six months).

  • If, however, the animal is fed on preventer during six months or more of the year, it is exempted from Zakat, unless it is subject to it as an article of trade.
     

  • Animals which are used for riding or for carrying loads are not subject to Zakat.
     

  • Animals pasturing to be sold later are not subject to Zakat since such animals are taken into account as articles of trade and the rules concerning the two are very different.

The rate of Zakat varies according to the type of the animal as given by the following tables:
 

Camels

No. of Camels            Rate of zakat

Up to 4                          No Zakat

From 5 to 9                  1 goat

10 .. 14                         2 goats

15 .. 19                         3 goats

20.. 24                          4 goats

25 .. 35                         1 one-year-old  female camel

36 .. 45                         1 two-year-old      "          "

46 .. 60                         1 three-year           "          "

61 .. 75                         1 four-year           "          "

76 .. 90                         2 two-year          "          "

91 .. 120                       2 three-year         "          "

Thereafter on each 40 Camels 2 two-year  female camel Or on each 50 Camels 1 three-year  female camel

    

 

Goats/Sheep

No. of Goats/ Sheep      Rate of Zakat

Up to 39                                 No Zakat

From 40 to 120                      1 goat

121 to 200                              2 goats

201 ,, 300                                3 goats

Thereafter on 1 goat for each 100

          

 

Cows, bulls, Oxen and buffaloes

No. of Animals               Rate of Zakat

Up to 29                          No Zakat

From 30 .. 39                  1 one-year-old male or female calf.

40 .. 59                            1 two-year-old     "    "       "       "

60 .. 69                            2 one-year-old     "    "       "       "

70 .. 79                           1 one-year-old and
                                        1 two-year-old     "    "       "       "

8o .. 89                            2 two-year-old     "    "       "       "

90 .. 99 3                         one-year-old       "    "       "       "

100 ..109                         1 two-year-old    "    "       "       "

110 ..119                         2 two-year and
                                         1 one-year-old     "    "       "       "

120.. 129                         3 two-year-old  or
                                         4 one-year-old     "    "       "       "

Thereafter 130 on: 1 one-year-old  for each 30 or 1 two-year-old  for each 40.

 

 

 

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Recipients of Zakat

Zakat must be distributed in the same community within which it is exracted. However, part of Zakat may be transferred to poorer Moslems in other places.

  There are eight categories of the beneficiaries of Zakah which Allah specifies in the Qur'an:

 

"The alms are only for the poor and the needy, for those who collect them, for those whose hearts are to be reconciled, for the freedom of those who are captives and in debt, for the cause of Allah, and for the wayfarers; [it is] a duty imposed by Allah. Allah is the Knower, the Wise" [Quran - al-Taubah 9: 60]

1) The Poor and the Needy are those who do not even have basic needs fulfilled.

 

2) Those who administer and collect Zakat even if they are rich.
  

3) People who need to be reconciled Islam. For example, new Moslems who need to be strengthened and the enemies of Islam to protect Moslems from their evils.
 

4) Freeing captives such as prisoners of wars.
 

5) People burdened by debts or guaranteed debts of others and are unable to pay them due to abject poverty.

6) Part of zakah designated for the cause of Allah to attain Allah's pleasure.

7) The traveler who is stranded in a foreign land and lacks the means to achieve his objectives is entitled to zakah, even though he could find someone to lend him the needed amount and he has enough resources in his own country to pay their debts.

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Zakat al-Fitr

  • Zakat al-Fitr must be paid each year before Eid al-Fitr, the feast that follows the fast of the month of Ramadan, to ensure that all the needy are able to celebrate the happy occasion.
     

  • Zakat al-Fitr is paid by the head of the family for each one of his dependents including small children or old men and women. Adult children with independent incomes must pay Zakat al-Fitr for themselves and their wives and children.
     

  • Zakat al-Fitr should basically be given as specific amount of food. However, it could also be given as money.

{It is estimated as k.d 1  -   £2.50 -  $5.00 per  person}

 

 

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Sadaqah/Donations

  • Sadaqah refers any voluntary contribution for the cause of God.
    It could be in cash or in kind such as food, clothes, pieces of furniture, or any other kind of useful items. Sadaqah is a deeply rooted practice of Muslim culture and Islamic values.
     

  • Sadaqah is an essential part of righteousness. It is a selfless act, which demonstrates submission to Mighty God and concern for one's fellow human beings. As Mighty God states in the Quran:

    "You shall not attain righteousness unless you spend on others of that which you love, and whatever you spend verily God has knowledge of it." [Al Imran 3:92]

  • Moslems usually give Sadaqah to thank God on happy occasions such as: weddings, birth of a baby, the return of the absentee, success in exams or business. Moslems also give Sadaqah for the sake of the deceased.
     

  • Giving Sadaqah is an alternative to the modern practices of giving parties, sending cards, or flowers which are unproductive and often wasteful of scarce resources.

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 Questions and Answers on Zakah

 

Q1: How do I pay Zakah on land that I hold for investment purposes? Do I pay in its book value or its actual market value?

 

A1: We first determine the actual market value of the land, or any other investment, on the day we want to pay Zakah. We would then pay Zakah on the actual market value.

 

Q2: What is the ruling about deductions for tax from a salary?

A2: Tax is the state's right as long as it needs it and spends it for the common good. Tax does not replace Zakah and can not be counted as part of it. Tax and Zakah are different in terms of liability, amount, and places of expenditure.

 

 

Q3: I gave my brother a piece of land to farm. Who should pay Zakah on it: me or my brother?

 

A3: If he is planting it for himself, then he must pay Zakah. If he is planting it for you, then the Zakah must be paid from the products of the land.

 

 

Q4: What if my wealth fluctuates during the year, below the Nissan level?

A4: If one held wealth equal to 85 grams of gold for four or five months and then the quantity was reduced below the prescribed limit but was regained after some time, and before the end of the yearly period, then payment of Zakah would be essential.

Thus if in the beginning or at the end of the year one possessed the prescribed wealth and in the middle of the year had less than that for sometime, Zakah is essential and he is not excused from its payment. But if the entire wealth is lost and he gets it again then the period of one year will be counted from the day of regaining it.

 

 

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