Zakat in Islam one of the five pillars of Islam. It is obligatory for all Muslims who meet the necessary criteria of wealth.
Zakat in Islam is an important act of worship and spiritual purification. Zakat requires Muslims to allocate a portion of their wealth to support the poor and needy.
In this comprehensive guide, we will cover the basics of Zakat in Islam. These include What Zakat Means, How Zakat Works, What is Zakat in Islam, Who is Eligible for Zakat, how to donate Your Zakat and many other details.
Understanding rules of Zakat in Islam allows Muslims to fulfill this religious obligation correctly and reap the spiritual rewards.
Zakat literally means “purification” in Arabic and it is also known as “Alms”. It refers to mandatory giving of a fixed portion of one’s wealth each year to help poor and needy.
Zakat is one of the five pillars of Islam. This means it is obligatory for all Muslims. The other pillars are:
The main purposes of Zakat in Islam are:
Therefore, Zakat is an act of worship, a financial obligation, and an important means of spiritual purification. Through Zakat, Muslims acknowledge that everything they own belongs to Allah.
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Zakat is only obligatory for Muslims who meet the minimum threshold or Nisab. One must also be an adult and possess wealth for a full year.
The main conditions to be eligible for paying Zakat are:
So, in summary, every adult Muslim who owns wealth equal to or above the Nisab and has held this amount for one lunar year must pay Zakat.
Nisab refers to the minimum amount of wealth one must have before being obliged to pay Zakat. The Nisab is calculated based on the market value of 87.48 grams of gold. Zakat is 2.5% of your total wealth above the Nisab amount.
Here are the current Nisab amounts based on gold prices:
Any wealth, be it gold, silver, cash, shares, or trade goods, is evaluated based on its current market price. It is then added together to determine your total wealth.
If your combined wealth exceeds the Nisab amount, only the surplus wealth above Nisab is subject to the 2.5% Zakat payment. Wealth below the Nisab is exempt.
The Zakat amount is quite simple to calculate. It is 2.5% of your total Zakatable assets above the Nisab amount.
For example:
Let’s assume your cash savings total as £8000
The Nisab for cash is £4800
So, your Zakatable amount is £8000 – £4800 = £3200
2.5% of £2500 is £80
Your Zakat due is £80
Zakat is only payable on the surplus wealth above Nisab. The Nisab amount itself is exempt from Zakat.
Each asset class has specific rules for evaluation and payment that can be discovered in detail through scholarly books on Zakat. The calculation involves determining the current market value of all assets and deducting any debts and liabilities.
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The timing of Zakat is based on the lunar calendar. It is typically due after having wealth equal to or above the Nisab for one complete lunar year.
Zakat should preferably be paid during the month of Ramadan before Eid prayers. However, it can be paid anytime during the year.
Upon disbursing Zakat, the Zakat “year” resets and a new year starts for calculating the next year’s Zakat. Some key points on Zakat timing:
Paying Zakat in Ramadan also allows it to be disbursed to the poor before Eid. The month of giving and sharing is the best time for wealthy Muslims to fulfill this pillar of Islam.
Muslim scholars usually recommend that if you have Zakatable amount above Nisab amount then pay Zakat in one go. However, if you cannot afford to pay the entire Zakat at one go then you can pay in instalments.
Zakat cannot be given to any random person or cause. The Quran has specified eligible recipients of Zakat funds. It is forbidden to misuse Zakat money on anything other than the authorized categories.
The eligible recipients of Zakat are:
Muslims wanting to pay Zakat should disburse it directly to eligible recipients. If unable, Islamic centers usually have Zakat committees to collect and distribute funds to verified eligible recipients.
There are two main types of obligatory Zakat in Islam:
Zakat al-Maal: The annual Zakat on wealth. It is calculated at 2.5% of surplus wealth above the Nisab, held for one lunar year. This is the main Zakat obligation for those who meet the criteria.
Zakat-ul-Fitr (Fitrana): The Zakat paid during Ramadan by all Muslims before Eid prayers. This is described in detail later.
Additionally, the Quran mentions Zakat on agricultural produce harvested from land:
Zakat-ul-Fitr, also called Fitrana, is a separate type of Zakat that is mandatory for every Muslim during the month of Ramadan.
The key rules of Zakat-ul-Fitr are:
The amount per person is typically the same as the amount given in Sadaqat-ul-Fitr, which is around £4 per person in the UK. This obligatory Zakat cleanses any indecent words or actions during Ramadan.
Fitrana should preferably be paid on or before the Eid-ul-Fitr prayers, directly to the poor and needy. The local mosque or Islamic center can also collect and distribute Fitrana to verified recipients.
Apart from fulfilling a religious obligation, paying Zakat has many spiritual and societal benefits:
On a personal level, paying Zakat instills empathy, gratitude, and discipline in managing wealth. Therefore, Zakat provides spiritual, financial and communal benefits.
Muslims living in the UK can easily fulfill their Zakat obligation by following these steps:
When it comes to giving to charity, two big terms come to mind: zakat and sadaqah. Even though they both aim to help people in need and make society better, they’re also quite different.
Let’s break down zakat first. Zakat is charity that Muslims are required to give. It’s not voluntary like sadaqah. Zakat has strict rules about who has to give, how much they give, and who gets the money. The amount is based on a percentage of a person’s wealth. The idea is to spread the wealth around fairly.
Now sadaqah is more flexible. It’s given voluntarily out of kindness. Givers can donate to any cause they want, whenever they want, in any amount. Sadaqah shows compassion and selflessness since givers give what they can to help.
While zakat and sadaqah work in different ways, their end goal is the same: helping the less fortunate and improving society. Zakat redistributes wealth as a religious duty. Sadaqah is voluntary charity that lets people make a difference as they wish.
At their core, both types of charity demonstrate caring and empathy. They let people look beyond themselves and lend a hand. Whether through zakat’s structure or sadaqah’s spontaneity, the heart is to build a more just and compassionate world.
When deciding on zakat or sadaqah, you make a choice about your values. Zakat highlights the duty to help the poor if you’re able. Sadaqah gives you the freedom to support diverse causes you care about.
Overall, zakat and sadaqah offer meaningful ways to impact society. Their shared goal of uplifting others unites them in purpose. Yet their different approaches let givers follow their own path in making a difference.
Zakat in Islam is an important act of worship that helps purify our wealth and assist the less fortunate.
By understanding the basic rules of Zakat, you can fulfill this religious obligation correctly and continue benefitting society. Paying the proper Zakat amount is one way to prove our thankfulness for Allah’s blessings upon you. In Sha Allah, may we all gain abundant rewards through this act of kindness and charity.
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Jewelry is evaluated at its current market value based on weight and gold/silver prices. Any jewelry below Nisab is exempt. The amount above Nisab is included in total assets to calculate 2.5% Zakat.
Houses meant for personal use are exempt from Zakat. If you have additional rental property held for investment, it will be subject to Zakat based on its current market value.
Yes, you can deduct any loans, credits cards or debts you owe from the calculation. Zakat is payable only on the surplus net amount after debt deductions.
If the joint account is shared with your spouse or child, the entire balance is considered yours and Zakat is calculated on the total amount.
Yes. You can pay Zakat on behalf of your dependents like children, parents or grandparents if they do not possess wealth equal to Nisab.
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