Many Muslims around the world either don’t pay Zakat, pay it reluctantly or cut corners to minimize the due amount. Some Muslims living in high tax areas feel Zakat overburdens them after paying direct and indirect taxes. This attitude is of course due to weakness in faith as many Muslims have not understood the principles of Zakat and what good it can do for the Muslim community.
There is so much wealth in the Muslim world that if all Muslims, on whom Zakat is due, pay their fair share and it is distributed honestly to the deserving than no Muslim will face extreme poverty and hunger as we see in so many countries these days. It will also eliminate the need for Western aid which usually comes with strings attached and sometimes for the purpose of spreading Christianity.
Let us try to understand some principles about Zakat.
Zakat is one of the five pillars which constitute the foundation of Islam(other four being declaration of belief, prayer 5 times a day, fasting in Ramadan and pilgrimage to Makkah if health and resources permit). Hardly ever is faith mentioned in the Quran without it being associated with prayer and Zakat and the need to fulfill both duties. So much is the importance of Zakat in Islam that it has been mentioned in eighty two places in the Quran in close connection with prayer. Prayer and Zakat are given precedence over other types of Islamic worship because prayer, which is offered purely for Allah’s sake, has an important role in restraining people from committing sinful and evil deeds, while Zakat has a greatly beneficial effect on both individuals and the society.
It is obligatory upon every Muslim, in possession of wealth above a prescribed limit, to pay Zakat. There are many advantages of which some are mentioned below:
1-It meets the needs of the poor of the society
2-It strengthens the good relation between the rich and the poor
3-It cleanse and purify the wealth
4-It promotes open-handedness, generosity and sympathy in a Muslim towards the needy person
5-It draws Allah’s blessing; causes increase in wealth and replacement of spent wealth as promised in the Quran “And whatsoever you spend of anything(in Allah’s cause), He will replace it. He is the Best of those who grant Sustenance.”(34:39)
On the contrary, a severe punishment awaits those who act miserly and are negligent in paying out Zakat. Allah describes this as “ And those who hoard up gold and silver(the money, the Zakat of which has not been paid), and spent it not in the way of Allah, announce unto them a painful torment. On the Day when that( money,gold and silver etc, the Zakat of which has not been paid) will be heated in the fire of Hell and with it will be branded their foreheads, their flanks, and their backs and it will be said unto them): ‘This is the treasure which you hoarded for yourselves. Now taste of what you used to hoard’.”(9:34,35)
Zakat is paid on the surplus of wealth which is left over after a passage of a year. It is thus paid on the accumulated wealth at least equal to “Nisab”(limit). Nisab is the minimum amount on which Zakat must be paid. If the wealth is below Nisab one does not have to pay Zakat. The Nisab is as follows:
Gold: 3 oz(85 grams)
Silver: 21 oz (595 grams)
Cash: equivalent to gold or silver which ever is less
Stocks & Merchandise: same as for cash
Zakat is obligatory on the following kinds of wealth
Leaving aside animals and agricultural yield for which specific rules apply, Zakat is paid at one-fortyth(1/40) part or 2.5% of the total accumulated wealth. For example, if the total of all liquid assets is $100,000 the Zakat due will be $2500. Items of personal use such as the house one lives in, furniture, cloths, cars, household items etc are exempt. Zakat is due on gold and silver jewelry even though it may be for personal use as such items are liquid assets and readily cashable for other use. Property, tools and equipment used to generate business income are exempt.
If one has liquid assets on the due date, Zakat will be paid on all of it irrespective of the future intent for some or all of it. For example, one may be saving money to buy a house; however, till the time when the money is used to buy the house it will be included in the calculation of Zakat as the money is liquid asset which can be used for any other purpose also if the need arises.
A common misconception is about outstanding debt. Suppose a person has $10,000 in cash on Zakat due date and he also has outstanding debt of $10,000. Since he has available assets on the due date he has to pay Zakat on all of it irrespective of the loan as the money can be used for any purpose. However, if he uses the $10,000 he owns to pay off his debt before the Zakat due date then his assets will be below the Nisab and no Zakat will be due.
Allah categories those who deserve to receive Zakat in Quran(9:60) as follows:
Relatives to whom Zakat may be paid are those to whom we are not duty bound to support. These include sons and daughters, parents and grandparents as supporting them is our religious obligation. It is recommended to pay Zakat in the following order of priorty; relatives, neighbours, community, city, country and then to Muslims in the rest of the world. For those of us living in Saudi Arabia or similar places where there is general prosperity and people eligible for Zakat are difficult to find, we may send our Zakat to the communities where we originally grew up.
The simplest way to calculate Zakat is to establish a specific Hijri date, say 1st of Ramadan. Every year on that date add up all the liquid assets you own such as bank accounts, market value of stocks on that day, amount of gold/silver you possess multiplied by the rate on that day, property/ land etc for sale(establish its market value). Add up all the amounts and multiply the total by 0.025. This will give you the Zakat amount payable.
May Allah guide us to the right path and give us the strength of faith to fulfill all his commandments and live a life as shown to us by His Prophet Mohammad(
).
Ameen.
There is so much wealth in the Muslim world that if all Muslims, on whom Zakat is due, pay their fair share and it is distributed honestly to the deserving than no Muslim will face extreme poverty and hunger as we see in so many countries these days. It will also eliminate the need for Western aid which usually comes with strings attached and sometimes for the purpose of spreading Christianity.
Let us try to understand some principles about Zakat.
Zakat is one of the five pillars which constitute the foundation of Islam(other four being declaration of belief, prayer 5 times a day, fasting in Ramadan and pilgrimage to Makkah if health and resources permit). Hardly ever is faith mentioned in the Quran without it being associated with prayer and Zakat and the need to fulfill both duties. So much is the importance of Zakat in Islam that it has been mentioned in eighty two places in the Quran in close connection with prayer. Prayer and Zakat are given precedence over other types of Islamic worship because prayer, which is offered purely for Allah’s sake, has an important role in restraining people from committing sinful and evil deeds, while Zakat has a greatly beneficial effect on both individuals and the society.
It is obligatory upon every Muslim, in possession of wealth above a prescribed limit, to pay Zakat. There are many advantages of which some are mentioned below:
1-It meets the needs of the poor of the society
2-It strengthens the good relation between the rich and the poor
3-It cleanse and purify the wealth
4-It promotes open-handedness, generosity and sympathy in a Muslim towards the needy person
5-It draws Allah’s blessing; causes increase in wealth and replacement of spent wealth as promised in the Quran “And whatsoever you spend of anything(in Allah’s cause), He will replace it. He is the Best of those who grant Sustenance.”(34:39)
On the contrary, a severe punishment awaits those who act miserly and are negligent in paying out Zakat. Allah describes this as “ And those who hoard up gold and silver(the money, the Zakat of which has not been paid), and spent it not in the way of Allah, announce unto them a painful torment. On the Day when that( money,gold and silver etc, the Zakat of which has not been paid) will be heated in the fire of Hell and with it will be branded their foreheads, their flanks, and their backs and it will be said unto them): ‘This is the treasure which you hoarded for yourselves. Now taste of what you used to hoard’.”(9:34,35)
Zakat is paid on the surplus of wealth which is left over after a passage of a year. It is thus paid on the accumulated wealth at least equal to “Nisab”(limit). Nisab is the minimum amount on which Zakat must be paid. If the wealth is below Nisab one does not have to pay Zakat. The Nisab is as follows:
Gold: 3 oz(85 grams)
Silver: 21 oz (595 grams)
Cash: equivalent to gold or silver which ever is less
Stocks & Merchandise: same as for cash
Zakat is obligatory on the following kinds of wealth
- The produce of earth like grains and fruits
- The grazing animals
- Gold, silver, cash
- Commercial commodities
Leaving aside animals and agricultural yield for which specific rules apply, Zakat is paid at one-fortyth(1/40) part or 2.5% of the total accumulated wealth. For example, if the total of all liquid assets is $100,000 the Zakat due will be $2500. Items of personal use such as the house one lives in, furniture, cloths, cars, household items etc are exempt. Zakat is due on gold and silver jewelry even though it may be for personal use as such items are liquid assets and readily cashable for other use. Property, tools and equipment used to generate business income are exempt.
If one has liquid assets on the due date, Zakat will be paid on all of it irrespective of the future intent for some or all of it. For example, one may be saving money to buy a house; however, till the time when the money is used to buy the house it will be included in the calculation of Zakat as the money is liquid asset which can be used for any other purpose also if the need arises.
A common misconception is about outstanding debt. Suppose a person has $10,000 in cash on Zakat due date and he also has outstanding debt of $10,000. Since he has available assets on the due date he has to pay Zakat on all of it irrespective of the loan as the money can be used for any purpose. However, if he uses the $10,000 he owns to pay off his debt before the Zakat due date then his assets will be below the Nisab and no Zakat will be due.
Allah categories those who deserve to receive Zakat in Quran(9:60) as follows:
- the poor
- those employed to collect Zakat
- to attract the hearts of those inclined towards Islam
- to free the captives
- for those in debt
- for Allah’s cause, i.e for Mujahideen
- for the wayfarer(traveler in need)
Relatives to whom Zakat may be paid are those to whom we are not duty bound to support. These include sons and daughters, parents and grandparents as supporting them is our religious obligation. It is recommended to pay Zakat in the following order of priorty; relatives, neighbours, community, city, country and then to Muslims in the rest of the world. For those of us living in Saudi Arabia or similar places where there is general prosperity and people eligible for Zakat are difficult to find, we may send our Zakat to the communities where we originally grew up.
The simplest way to calculate Zakat is to establish a specific Hijri date, say 1st of Ramadan. Every year on that date add up all the liquid assets you own such as bank accounts, market value of stocks on that day, amount of gold/silver you possess multiplied by the rate on that day, property/ land etc for sale(establish its market value). Add up all the amounts and multiply the total by 0.025. This will give you the Zakat amount payable.
May Allah guide us to the right path and give us the strength of faith to fulfill all his commandments and live a life as shown to us by His Prophet Mohammad(
Ameen.
