Zakat is one of the five pillars of Islam. It has been mentioned, along with daily Prayers (Salaat / Namaz), over seventy times in the Quran. Allahs word commanding “…..and establish regular Salaat and GIVE regular Zakat…..” are referred to in many parts of the Quran. From this we can conclude that after Salaat, Zakat is the most important act in Islam. Just as Salaat is the most important act of worship which has to be performed bodily, so is Zakat the main act of worship which has to be performed monetarily. Those who fulfill this duty have been promised abundant reward in this world and hereafter.
Whoever evades Zakat has been sternly warned in the Quran and Hadith of the consequences.
Linguistically, ZAKAT has two meanings: purification and growth. Technically, it means to purify ones possession of wealth by distributing a prescribed amount to the poor, the indigent, the slaves or captives, and the wayfarer. There are many major benefits of giving Zakat:
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 the His commands.
Zakat functions as a 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.
Zakat payer pays his dues to Allah as an act of worship, a token of submission and an acknowledgment of gratitude. The receiver of Zakat receives it as a grant from Allah out of His bounty, a favor for which he is thankful to Allah.
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 poor.
Zakat is obligatory upon a person if :
He or she is an adult, sane, free and Muslim.
He/she must possess wealth in excess of specified minimum (Nisaab) excluding his or her personal needs (clothing, household furniture, utensils, cars etc. are termed article of personal needs).
It should be possessed for a complete lunar year.
It should be of productive nature from which one can derive profit or benefit such as merchandise for business, gold, silver, livestock etc.
The amount of wealth which makes one liable for Zakat is called Nisaab.
Gold 87.48 Gram 7.50Tolas 1350Grains 2.8125Troy Oz.
Silver 612.36Gram 52.50Tolas 9450Grains and 19.6875 Troy Oz.
Nisaab of cash, stock or bonds, other cash assets is the equivalent amount of Gold or Silver. 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 in excess of the minimum Nisaab as specified in the above table, the Zakat is due at the rate of 2.5%.
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 course of 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 IS IMPOSED:
Gold and silver, in any form.
Cash, bank notes, stocks, bonds etc.
Merchandise for business, equal to the value of Nisaab.
On income derived from rental business.
DISTRIBUTION OF ZAKAT:
Zakat should be given as soon as possible after it becomes due.
All of the Zakat can be given to one person or to several persons.
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.
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.
Zakat cannot be given for the construction of Masjid, Madrasah, Hospital, a well, a bridge or any other public amenity.
Zakat can be paid in kind from the same merchandise on which it is due, or alternatively, it could be paid in cash.
TYPES OF WEALTH ON WHICH ZAKAT IS NOT IMPOSED:
On any metals other than gold or silver. Read the rest of this entry »