The Divine Rules of Zakat (Ahkaam ul-Zakat)
Zakat is not part of the Islamic economic system.
Hoarding of wealth is prohibited in Islam,even if you are willing to pay Zakat on it. Zakat In the Shari'ah, it is defined as 'specified dues taken from a specified wealth or property, after a specified period of time, within specified rules, and distributed to specified categories of people.' Zakat purifies the heart from the detested trait of stinginess and purifies the wealth through giving out a portion of it. It also causes the wealth to grow through Allah's blessings. While regular charity is strongly recommended and abundantly rewarded by Allah (swt), Zakat is a debt we owe Him, and must be paid as a result of our belief in Him.
Zakat, as a specific amount, was ordained in Medinah during the month of Shawwaal, in the second year of Hijrah. The order to give Zakat is associated with the order to perform prayers over eighty times in the Qur'an. Allah (swt) says:
" and perform the Salat and give the Zakat "
Allah (swt) says to His Messenger (saws):
"Of their wealth take aims so at, through it, you may purify and sanctify them.." (Tauba EMQ 9:103 )
The order to give Zakat is established numerous times not only in the Qur'an, but also in the Ahadith of Prophet Muhammad (saw). In a Hadith narrated by AI-Bukhari and Muslim, the Prophet (saws) said, "Islam is built on five pillars... and giving Zakat....." Al-Bukhari, Muslim, and others also narrated that when the Prophet (saws) sent Mu'adh to the people of Yemen, he told him to "...let them know that Allah has ordained on them Zakat, to be taken from their rich and given to their poor... "
WHO MUST PAY ZAKAT?
Zakat is an obligation on every Muslim, male or female, minor or adult, sane or insane, who has an amount of money, called "Nisab," which has remained in his/her possession for one full lunar year.
HOW CAN MINORS OR THE MENTALLY INSANE PAY ZAKAT?
They do not have to pay it themselves. The Zakat is due on their property and wealth and so their trustee or guardian can pay the Zakat, from their wealth, for them.
WHAT IS THE NISAB?
Nisab is the minimum amount of money, property and other wealth which is subject to Zakat. If the individual has less than this amount, then he is exempt from paying Zakat. The Nisab is 20 dinars of gold (each dinar is 4.25 grams), which is equivalent to $1124 or £750 (based on recent market gold prices).
WHAT TYPES OF WEALTH ARE SUBJECT TO ZAKAT?
Gold, silver, money, livestock, agricultural products, articles of merchandise, and inventories are subject to Zakat. Zakat is calculated based on the TOTAL amount of wealth owned at the end of the lunar year, not only the Nisab. Thus, the wealth subject to Zakat is the total amount that meets or exceeds the Nisab.
HOW DO I TREAT MY BUSINESS WITH REGARD TO PAYING?
If it is a Halal business, then one should take an inventory every lunar year. Add to it the money/wealth one owns and then subtract the money/wealth one owes. Pay two and a half percent (2 1/2 %) of the result as Zakat. Note: Fixtures, shelves, machines installed in the factory, and Zakat business cars are not subject to Zakat. However, if the business entails car or machinery sale, then they would be subject to Zakat.
MUST I PAY ZAKAT ON JEWELLERY?
Women's jewellery are not subject to Zakat unless they are items of business. The scholars have agreed that jewellery made of precious stones or metals, other than gold or silver, is not subject to Zakat. Ash-Shu'bi, Tawoos, Malik, Ash Shafi’i, and Ahmad are a in agreement on the above opinion. They have drawn their evidence from a narration by Imam Malik that Aa'isha (Ra) looked after her orphaned nieces who used to wear Jewellery and she did not pay Zakat on the jewellery. Imam Malik also narrated that 'Abdullah Ibn 'Umar (Ra) used to give his daughters and female servants jewellery made of gold and he did not pay Zakat on them.
HOW IS THE ZAKAT YEAR (HAWL) DETERMINED?
The Zakat year (hawl) is one lunar year starting from the time one's wealth reaches the Nisab. If the wealth drops below the Nisab any time during the year, one should stop counting days and start again the day the wealth reaches the Nisab.
Once the total amount has stayed equal to or above the Nisab for one whole lunar year, then Zakat is due on this wealth, at a rate of two and a half percent (2.5 %) of the amount owned at the end of the year.
WHO RECEIVES THE ZAKAT?
Allah (swt) has specified eight categories of people eligible for Zakat.
"Alms are for the poor, the needy, the employees who administer the funds, those whose hearts have been recently reconciled to the Truth, those in bondage, those in debt, in the cause of Allah, and the wayfarer, (thus it is ) ordained by Allah, and Allah is most knowledgeable, most wise." (EMQ 9: 60)
Based on this ayah, the ways of spending Zakat funds can be classified as follows:
1. For the poor (Fuquraa') who do not have enough to take care of their basic needs.
2. For the needy (Masakeen) who have nothing.
3. For those employed to administer the funds by the State (Aamileena ‘alayhaa). An individual may not employ himself as an administrator of Zakat.
4. For those who are close to accepting Islam (Mu’allafati Quloobuhum). This category can only be applied in an Islamic State.
5. For freeing a Muslim person from slavery (Fir Riqaab).
6. For those who are in debt (Gaarimeen).
7. For Jihad (Fi Sabeelillah).
Note: Whenever the term "Fi Sabeelillah (in the path of Allah),, is associated with spending (Infaaq), it means Jihad. It does not mean to spend anywhere one interprets to be the path of Allah (swt) (e.g. schools and Masjids etc.). If this was the case, then mentioning categories would become meaningless.
8. For the wayfarer (Ibn-is-Sabeel) who is stranded in a strange area without the financial ability to return home, Zakat could be used to assist their return.
It is preferable that Zakat be paid to the poor and the needy among the relatives first.
WHO CANNOT RECEIVE THE ZAKAT?
There are categories of people who are not eligible to receive Zakat. They include the rich who have enough to support themselves. And the healthy-who are capable of earning their living, unless they cannot find a job or their job does not provide enough to support themselves and their family. About these two categories, an authentic Hadith was narrated by Abu Dawood where the Prophet (saws) said, "Alms are not to be given to the rich or to the well-built." The term "well-built" conveys the meaning that one is able to work and support oneself. In addition, Zakat cannot be paid to one's dependants which include the wife, the parents, grandparents, children, and grandchildren. And lastly, Zakat cannot be paid to a non-Muslim!
IF I HAVE A DEBT, DO I MINUS THAT FROM THE AMOUNT ON WHICH I HAVE TO PAY ZAKAT?
Debts are usually of two types:
a) Due for pay back in the immediate future, and
b) Long-term pay back arrangement.
If the debt is due in the very near future at a time of paying Zakat, this debt can be excluded from the amount on which Zakat is due. However, if the debt is being paid back as instalments, say every month or every year, then the amount that has been paid back over the previous lunar year is subtracted from the total income in the process of calculating Zakat.
CAN TAXES BE SEEN AS ZAKAT?
No. For Two Reasons:
1) The avenues for spending Zakat funds in Islam have been clearly defined in the before mentioned ayah.
2) Zakat is paid only to Muslims.
3) The portion of the tax spent on projects for the poor is not precisely known, since other projects are funded from the same pool of tax money.
4) Zakat is an act of worship ('ibadah), whereas tax is not.
IS ZAKAT DUE ON INTEREST, STOCKS AND BONDS?
Here, paying Zakat is irrelevant. All of these financial instruments are prohibited (haram) for Muslims. Along with earning money, you may be earning yourself a place in Hellfire.
IF ZAKATHAS NOT BEEN PAID FOR YEARS, DOES IT HAVE TO BE PAID NOW?
Zakat is considered a debt we owe Allah (swt), and it should be paid when it is due without any delay. If a person is supposed to pay Zakat and he/she neglected to pay it for years with or without a legitimate reason, then the whole amount of Zakat, which was not given, should be paid immediately after calculating it precisely. Moreover, if s/he had no legitimate reason for being late to pay Zakat, s/he should repent and ask Allah (swt) for forgiveness.
IN THE ABSENCE OF THE ISLAMIC STATE WHAT DO I DO?
You have to pay Zakat whether there is a State or not. Zakat is like Salat; it is a MUST for all places and at all times.
CAN SOMEONE DISTRIBUTE ZAKAT ON MY BEHALF?
Yes. However one cannot deduct from Zakat for him/herself, unless eligible and informed you about it.
CAN A MASJID SPEND FROM THE ZAKAT ON ITSELF?
No. The Zakat is distributed to ONLY the eight categories mentioned in Surah at-Tawbah, and the Masjid is not one of them. The Masjid can distribute the Zakat, but it cannot use it.
O Muslims! Do not Worship Ramadhan:
ISLAM HAS BECOME A HANDFUL OF RITUALS for a lot of Muslims. The arrival of this 'holy" month drives a shiver through the hearts making most Muslims do rigorous acts of worship like Taraweh. Ramadhan’s end to most means going back to their routine. This annual cycle shows that Muslims are actually worshipping the month of Ramadhan and not Allah (Swt). Why? Because they obey Islam only. in this month, proving that it is not for the submission to Allah. Muslims, if they wish to obey Allah, must nor restrict themselves to obeying Allah (swt) only in Ramadhan. Allah (Swt) says in Al-Qur’an:
"O you who believe, enter Into Islam completely and do not follow the footsteps of Satan." Baqarah 2:208