Zakat in Islam

Zakat is an obligatory act ordained by Allah (SWT) to be performed by every Muslim who can. It is an important pillar of Islam; one that carries immense significance. For those who are unfamiliar with the concept, Zakat is the act of giving part one’s wealth and property to help the poor of the community. Through this, the Muslim community can look out for it’s poorest and neediest. Allah says:

 

وَأَقِيمُوا الصَّلَاةَ وَآتُوا الزَّكَاةَ وَمَا تُقَدِّمُوا لِأَنفُسِكُم مِّنْ خَيْرٍ تَجِدُوهُ عِندَ اللَّهِ إِنَّ اللَّهَ بِمَا تَعْمَلُونَ بَصِيرٌ

 

“And establish the prayer and give [the] zakah. And whatever you send forth for yourselves of good (deeds), you will find it with Allah. Indeed, Allah of what you do (is) All-Seer.” (Surah Al-Baqarah 2:110)

 

Zakat, with its innumerable facets, is a bond between members of society, one wherein collective harmony is dependent on individual harmony. Zakat explicitly creates a virtuous setting that eliminates various social problems by establishing a harmonious atmosphere for both the rich and the poor. Allah says:

 

رِجَالٌ لَّا تُلْهِيهِمْ تِجَارَةٌ وَلَا بَيْعٌ عَن ذِكْرِ اللَّهِ وَإِقَامِ الصَّلَاةِ وَإِيتَاءِ الزَّكَاةِ يَخَافُونَ يَوْمًا تَتَقَلَّبُ فِيهِ الْقُلُوبُ وَالْأَبْصَارُ

 

“Men – not distract them trade and not sale from (the) remembrance of Allah and (from) establishing the prayer and giving zakah. They fear a Day will turn about therein the hearts and the eyes.” (Surah An-Nur 24:37)

 

Zakat is something that Allah (SWT) and the last Prophet Muhammad (PBUH) talked about in great detail. There is a Zakat for everything, and it is the righteous duty of every Muslim to undertake this task in whichever way possible.

 

Zakat is distributed among 8 asnaf (categories) of people, namely:

  1. Fakir – One who has neither material possessions nor means of livelihood.
  2. Miskin – One with insufficient means of livelihood to meet basic needs.
  3. Amil – One who is appointed to collect zakat.
  4. Muallaf – One who converts to Islam.
  5. Riqab – One who wants to free himself from bondage or the shackles of slavery. (In Singapore, zakat due to this category of recipients is spent on those who need help to pursue education or to improve their standard of living).
  6. Garmin – One who is in debt (money borrowed to meet basic, halal expenditure).
  7. Fisabillillah – One who fights for the cause of Allah.
  8. Ibnus Sabil – One who is stranded in the journey.

Zakat is possible in every way and Muslims must observe righteousness by undertaking this duty to heart whenever the circumstance permits. Here is some comprehensive information about Zakat to make it easier to understand. To make the concept a little more straightforward to understand, we have put together some information regarding Zakat.

 

Major benefits of giving Zakat:

  1. It reminds Muslims of the fact that whatever wealth they may possess is due to the blessings of Allah and as such it is to be spent according to His Commands.
  2. Zakat functions as social security for all. Those who have enough money today pay for what they have. If they need money tomorrow they will get what is necessary to help them live decently.
  3. The Zakat payer pays his dues to Allah as an act of worship, a top submission and an acknowledgement of gratitude. The receiver of Zakat receives it as a grant from Allah out of His bounty, a favour for which he is thankful to Allah.
  4. Economically, Zakat is the best check against hoarding. Those who do not invest their wealth but prefer to save or hoard it would see their wealth dwindling year after year at the rate of the payable Zakat. This helps increase production and stimulates supply because it is a redistribution of income that enhances the demand by putting more real purchasing power in the hands of the poor.

Zakat is obligatory upon a person if:

  1. He or she is an adult, sane, free and Muslim.
  2. He/she must possess wealth over the specified minimum (Nisaab) excluding his or her personal needs (clothing, household furniture, utensils, cars, etc. are termed article of personal needs).
  3. It should be possessed for a complete lunar year.
  4. It should be productive from which one can derive profit or benefit such as merchandise for business, gold, silver, livestock, etc.

To give Zakat is to undertake a highly preached, highly emphasized and highly encouraged act in Islam. It is something that has been given a great deal of importance, not just in Islam, but also in other religions that have their versions of the concept, all leading to one ultimate goal; to help people.

 

The amount of wealth, which makes one liable for Zakat, is called Nisaab. The Nisaab as fixed by Rasulullah (sallal laahu alaihi wasallam) is as follows:

  1. Gold: 87.48 (grams) or 7.5 Tolas
  2. Silver: 612.36 (grams) or 52.5 Tolas
  3. Nisaab of cash, stock or bonds, other cash assets is the equivalent amount of Gold or Silver.
  4. Nisaab is calculated by adding up the cash value of all the assets such as gold, silver, currency, etc. and if it is equal to or over the minimum Nisaab as specified in the above table, the Zakat is due at the rate of 2.5%.
  5. The payment of Zakat is compulsory on the excess wealth or effects which is equal to or exceeds the value of Nisaab, and which is possessed for a full Islamic year. If such wealth decreases during the year and increases again to the value of Nisaab before the end of the year, the Zakat then must be calculated on the full amount that is possessed at the end of the year.

TYPES OF WEALTH ON WHICH ZAKAT ARE IMPOSED:

  1. Gold and silver, in any form
  2. Cash, banknotes, stocks, bonds, etc.
  3. Merchandise for business, equal to the value of Nisaab
  4. Livestock
  5. On income derived from rental business

CALCULATION OF ZAKAT

  1. To calculate Zakat on jewellery, etc. one must first determine the gold or silver content and then calculate the Zakat according to the current market price.
  2. If the Gold possessed is less than 87.48 grams or if silver possessed is less then 612.36 grams, but the value of both combined is equal to or exceeds the Nisaab of either Gold or Silver, the Zakat will be due.
  3. In the event of an article not being of pure gold or pure silver, but containing a mixture of other metals and the gold or silver content is more than the other metal, it will be regarded as gold or silver and Zakat will be due. But in the case where other metal/s is of greater quantity than either gold or silver, Zakat will not be due on this article.
  4. For stocks (shares held in a company), Zakat is calculated based upon the current market value. As machinery, land, fixtures, and fittings, furniture, buildings, etc. are exempt from Zakat, one is allowed to subtract these from the total asset. This could be obtained from the annual reports. For example, if one has shares worth R1000 and machinery, land, etc., are worth 5% of the total asset, then deduct R50 for these assets, afterwards deduct the liabilities of the company proportionately to the percentage of shares held. Zakat must be calculated on the balance.

DISTRIBUTION OF ZAKAT

  1. Zakat should be given as soon as possible after it becomes due.
  2. All of the Zakat can be given to one person or several persons.
  3. A poor man cannot be paid for his work from Zakat nor can Zakat be given in payment of services, except to the people appointed by the Islamic government to collect Zakat.
  4. Zakat will only be valid if the recipient is made the owner of that amount. If, for example, a few needy persons are fed a meal from Zakat money, then Zakat will not be fulfilled as they were not made owners of the food.
  5. Zakat cannot be given for the construction of Masjid, Madrasah, Hospital, a well, a bridge or any other public amenity.
  6. Zakat can be paid in kind from the same merchandise on which it is due, or it could be paid in cash.

مَّن ذَا الَّذِي يُقْرِضُ اللَّهَ قَرْضًا حَسَنًا فَيُضَاعِفَهُ لَهُ أَضْعَافًا كَثِيرَةً وَاللَّهُ يَقْبِضُ وَيَبْسُطُ وَإِلَيْهِ تُرْجَعُونَ 

 

”Sadaqah is a guaranteed investment. Who is he that will loan to Allah a beautiful loan which Allah will double unto his credit and multiply it many times?’’ (Surah Al-Baqara, 2:245)

 

TYPES OF WEALTH ON WHICH ZAKAT ARE NOT IMPOSED:

  1. On any metals other than gold or silver.
  2. Fixtures and fittings of a shop, car, trucks or any delivery vehicle, etc., which is used in running a business.
  3. Diamonds, pearls, other precious or semi-precious stones, which are for personal use.
  4. There is no Zakat on a personal residence, household furniture, pots and pan, personal clothing, whether they are in use or not.
  5. There is no Zakat on a person whose liabilities exceed or equals his assets. Some Mortgage in this country is not to be counted as personal liability for the Zakat purpose.

This is not an Islamic obligation, but rather a practice conducted to help those in need or the deprived. This act goes to show the strength of the believer’s faith and increases it further. Sadaqah does not refer solely to money in Islam because a Sadaqah can be anything as small as flashing a smile towards a stranger or removing an obstacle or thorn from a path.

 

Following are the verses on Zakat from the Holy Quran:

  • “Those who give to charity night and day, secretly and publicly, receive their recompense from their Lord; they will have nothing to fear, nor will they grieve.” (Quran 2:274)
  • “They give money to charity only to show off while disbelieving in GOD and the Last Day. If one’s companion is the devil, that is the worst companion.” (Quran 4:38)
  • “You cannot attain righteousness until you give to charity from the possessions you love. Whatever you give to charity, GOD is fully aware thereof.”  (Quran 3:92)
  • “If the debtor is unable to pay, wait for a better time. If you give up the loan as a charity, it would be better for you, if you only knew.” (Quran 2:280)
  • “You shall observe the Contact Prayers (Salat) and give the obligatory charity (Zakat), and bow down with those who bow down.” (Quran 2:43)
  • “who believe in the unseen, observe the Contact Prayers (Salat), and from our provisions to them, they give to charity.” (Quran2:3)

It is simply a deed that it helps someone else, in any way. Zakat is a very easy form of charity and can be conducted by anyone to help them increase their faith. Sadaqah is an Islam term that means the act of giving to a Muslim charity voluntarily out of one’s goodwill and heart’s sincerity. This means that Sadaqah is an act of kindness whose sole focus is to help in all ways possible. Zakat in the simplest and easiest form which can be performed in aid of increasing one’s faith. Allah says:

 

إِنَّمَا يَعْمُرُ مَسَاجِدَ اللَّهِ مَنْ آمَنَ بِاللَّهِ وَالْيَوْمِ الْآخِرِ وَأَقَامَ الصَّلَاةَ وَآتَى الزَّكَاةَ وَلَمْ يَخْشَ إِلَّا اللَّهَ فَعَسَىٰ أُولَٰئِكَ أَن يَكُونُوا مِنَ الْمُهْتَدِينَ

 

“Only will maintain (the) masajid of Allah (the one) who believes in Allah and the Day the Last, and establishes the prayer and gives the zakah and not fear except Allah. Then perhaps those, [that] they are of the guided ones.” (Surah At-Taubah 9:18)

 

Zakat comes in different forms and it is not always reflected through money. On the contrary, it can be the smallest act of kindness to make someone feel better through a smile or prayer or helping someone carry a load. One must understand that rather an obligation for Islam, this is a voluntary act exercised in helping the needy and less privileged. The faith of the believer is highlighted in performing this act and is heightened even more.

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