Zakat

1.

Meaning Of Zakat
Zakt (Arabic: [ zkh], sometimes "Zakh/Zekat"[1]) or "alms giving", one of the Five Pillars of Islam, is the giving of 2.5% of one's possessions (surplus wealth) to charity, generally to the poor and needy. It is often compared to the system of tithing and alms, but it serves principally as the welfare contribution to poor and deprivedMuslims, although others may have a rightful share. It is the duty of an Islamic community not just to collect zakat but to distribute it fairly as well.

2.

Benefits of Zakat
The benefits of Zakat, apart from helping the poor, are as follows: A. Obeying God

B. Helping a person acknowledge that everything comes from God on loan and that we do not really own anything ourselves. C. And since we cannot take anything with us when we die we need not cling to it. D. Acknowledging that whether we are rich or poor is God's choice so we should help those he has chosen to make poor. E. F. G. H. I. J. Learning self-discipline Freeing oneself from the love of possessions and greed Freeing oneself from the love of money Freeing oneself from love of oneself Behaving honestly Allah (swt) and His Messenger (saws) inform us that giving Zakat not only fulfils the duty of giving zakat, and helping those in need, but also purifies one's wealth so that it may continue to grow -- indeed, this is the Arabic meaning of the word 'Zakat.'

3.

Retribution for not giving Zakat

The person who has some wealth and still does not take out zakaat for it is regarded as a great sinner in the sight of Allah Ta'ala. He will be severely punished on the day of judgement. Rasulullah sallallahu alayhi wa sallam said: "The person who possesses gold and silver and does not give zakaat for it, then on the day of judgement, slabs of fire will be made for him. These slabs will be heated in the fire of jahannam and his sides, forehead and back will be branded with them. When these slabs become cool, they will be re-heated and the entire process will be repeated." Rasulullah sallallahu alayhi wa sallam said: "The person who has been given wealth by Allah Ta'ala and despite this does not give zakaat for it, then on the day of judgement this wealth of his will be turned into a huge poisonous snake which will encircle his neck. It will then tear the sides of his mouth apart and tell him: 'I am your wealth and I am your treasures.'" We seek refuge in Allah Ta'ala. Who can bear such severe punishment? It is the height of foolishness and stupidity that we are prepared to pay such a great penalty for a little greed and selfishness on our part. It is extremely foolish and improper to refuse to spend in the path of Allah the wealth that Allah Himself has granted to us.

4.

Payer of Zakat
Zakah must be paid by the one who is: 1- Muslim 2- Major (Baligh) 3- Sane 4- Sahib-un-nisaab (owner of wealth above the level of nisaab

5.

Nisaab
In Sharia (Islamic Jurisprudence) nib is zakt-payable amount, which savings or capital or product must exceed in order for the Muslim owner to be obliged to give zakat. Several hadith have formulas for calculating nib. One of the most well known states that No Zakt is due on wealth until one year passes. The amount is for gold 20 dinrs, and for silver 200 dirams. With todays weights, the zakt-payable amount the amount above is 2.9193 troy ounces (90.8 grams) gold or 19.0975 ozt. (594 g silver). In general, nib is considered an amount equal to the essential needs of a person or family for one year. In many modern societies, nib is often interpreted to equate a governmentally determined poverty threshold.

6.

Zakat on Debts
The basic principle is that debts are deducted from wealth, and if the remainder is still over the nisab threshold, zakat is payable, otherwise not. However, if a person has a large debt that is being paid off in instalments, such as a mortgage or a large credit card debt, then one should only deduct the payment that is currently due from one's assets.

7.

Recipient of Zakat
Zakat is for the poor and the needy and those who are employed to administer and collect it, and for those whose hearts are to be won over, and for the freeing of human beings from bondage, and for those who are overburdened with debts and for every struggle in Gods cause, and for the wayfarers: this is a duty ordained by God, and God is the All-Knowing, the Wise. (Quran 9:60) One of the five pillars of Islam, Zakat is a purification for ones wealth, freeing one from the love of possessions by encouraging humility and discipline. An essential principle of Islam is that everything belongs to God. We do not own our wealth, but have been entrusted with worldly possessions by Him. Zakat means purification and growth; possessions are purified by setting aside a portion for those in need, and like the pruning of plants, this cutting back encourages new growth. The annual payment of zakat is different to any charitable gifts given out of kindness or generosity, otherwise known as sadaqah. Zakat is a mandatory religious obligation and forms the systematic giving of 2.5% of ones net wealth each year, benefitting targeted recipients on a sustained basis. From the Quranic verses ordaining zakat, eight classes of recipients have been identified by the scholars. As Ramadan approaches, we talk to British charities that distribute support to the eight beneficiaries of zakat.

The Masakeen - 'the destitute' Fuqaraa - 'the needy or poor' Amil' Zakah - 'the alms collectors' Fi sabi `Lillah - 'in the path of God' Gharimun - 'people burdened with debt' Ibn as'Sabil - 'the wayfarers' Riqab - 'people in bondage or slavery' Mu'Allaf - 'those who have inclined towards Islam'

8.

Zakatable Assets
If the immovable property was purchased as an investment (to hold as capital) and not to resell, then the value of the asset is exempt from Zakat. A subsequent change of intention in the case where the owner, who had originally purchased the immovable property for investment (to hold as capital), now decides or intends to sell it for profit will not alter the character of the asset for Zakat purposes and the asset remains exempt from Zakat.

9.

Zakat on Gold and Silver

Zakat on Gold = 2.5% of monetary value ALL gold present for a lunar year (The calculation in the "Salvation of the Soul" and "Mukhtasir Khudri" involve disregarding certain) Zakat is Fardh on gold and silver, be it in the form of bullion, jewellery, cash, bank notes, utensils or any other form . The value of these should be equal to the amount which is shown under: GOLD:20 Mithqals = 80 grams SILVER: 200 Dirhams 612 . 36 grams If the gold possessed is not equal to the value of 87 . 48 grams, or silver possessed is not equal to the value of 612 . 36 grams, but the value of both combined is equal to the value of either the nisab of gold and silver, then Zakat will be fardh . So, if a person has 620 grams of silver (which is more than the nisab) and before a whole year has elapsed he acquires 50 grams of gold (which is less than the nisab) then the value of this gold must be added to the value of the silver, and thereafter the nisab reckoned . The two must NOT be reckoned separately, as this will be a cause of avoiding Zakat.

10.

Zakat on Cash
Zakat is an obligation ordained by Allah Most High upon every Muslim who becomes the owner of a specific amount of wealth known as the Nisab. If ones wealth is equal or more than this specific amount, Zakat will become obligatory upon him. This Nisab is the equivalent in cash, gold, silver, merchandise, etc of 612 grams of silver or 87.48 grams of gold.

11.

Zakat on trading assets

Hence on the day that you pay Zakah you evaluate all your zakatable assets ( i.e. gold, silver, trading stocks, money etc. ) that you have at that date and then pay zakah on the total at the rate of 2.5%.

12.

Intention of Zakat
A person should give Zakat with the intention of Qurbat, that is, to comply with the pleasure of Almighty Allah. And he should specify in his Niyyat, whether he is giving the Zakat on his wealth, or Zakatul Fitra. Also, if it is obligatory on him to give Zakat on wheat and barley, and if he wants to pay a sum of money equal to the value of Zakat, he should specify whether he is paying in lieu of wheat or barley. If a person becomes liable to pay Zakat on various items, and he gives a part of Zakat without making Niyyat of any of those items, if the thing which he has given is of the same class as any one of those items, it will be reckoned to be Zakat on that very commodity. For instance, if it is obligatory on a person to pay Zakat on 40 sheep and on 15 mithqals of gold, and he gives one sheep as Zakat without any specified Niyyat of either, it will be treated to be Zakat on sheep. But if he gives some silver coins or bank notes, which does not belong to either class, as it is neither sheep nor gold, it is a matter of Ishkal and the Zakat will not be considered as paid. If a person appoints someone as his representative to give away the Zakat of his property, he should, while handing over Zakat to the representative, make Niyyat that whatever his representative will later give to a poor is Zakat. And it is better that his Niyyat remains constant till Zakat reaches the poor. If a person gives Zakat to poor, or to the Mujtahid, without making the Niyyat of Qurbat, it will be accepted as Zakat, although he will have committed a sin for not having the Niyyat of Qurbat.

13.

The Principal of Tamleek

"Tamleek-e-Faqeer" (making a poor,indigent owner of Zakaat) is one of the essentials of Zakaat which means that the payer of Zakaat must pay it with the mere intention of paying Zakaat, fulfilling the obligatory act and carrying out the command of Allah having no personal end whatsoever and make the recipient, beneficiary of Zakaat full owner of it so that he may use it to meet his lawful needs and for any lawful work at his own sweet will.

14.

Agency and Zakat

Islam says Zakat should be collected by the governor or concerned government agency for this purpose, in order to regulate the affairs of Zakat and plan how it should be paid out during the short-term as well as the long term in order to

eradicate poverty and uplift the disadvantaged segments of the society as well as the needy to become Zakat givers instead of recipients of Zakat. Therefore, Zakat is an Islamic concept that proved to be very efficient at eradicating poverty during the age of Islamic Kalifas reaching a point that Zakat was collected but no recipients worthy of collecting Zakat were to be found.

15.

Zakat Calculator
To pay Zakat you need to fulfill two conditions: 1- Nisab Your assets has to reach the "Nisab" value, i.e. value equal to 3 oz (28 gms) of pure Gold. 2- Hawl Due date is one HIJRI year from the day your assets reach the Nisab. If you dont remember the exact date, then choose the earliest date that allows for safety margin, adhere to it. (eg. 1st of Ramadan). All your calculations should be based on what you will possess on the due date not what you possess on the payment day. (Consult your local Imam/Scholar for further details)