What is zakat
Zakat, the giving of alms to the poor and needy, is one of the five pillars of Islam. It is obligatory upon every adult Muslim of sound mind and means. Zakat purifies the wealth.
Prophet Mohammad (PBUH) has said “Whoever pays the zakat on his wealth will have its evil removed from him” (Ibn Khuzaimah and at-Tabaraani).
The individual must own a specific amount of wealth or savings (after living costs, expenses etc). This is referred to as Nisaab and is the threshold at which Zakat becomes payable. The amount of Zakat to be paid is 2.5% of Nisaab.
What is Nisaab
The value of the nisaab in prophetic tradition is 87.48 grams of pure gold or 612.36 grams of pure silver so the monetary value of the nisaab will vary according to current prices.
Who is liable to pay Zakat
You should record the Islamic date on which you first became the owner of Nisaab – if, on the same date the following lunar year, you are still the owner of Nisaab, you will be obliged to pay Zakat. Many Muslims choose to give it during Ramadan as the rewards for good deeds performed in Ramadan are greater than in any other month.
List of the possessions on which zakat is due:
- Gold and Silver
- Stock and Shares
- Produce of mines
- Agricultural produce and Cattles
- Money you have lent to others
- Rental Income
- Personal Income
- Cash and Savings
Who can receive Zakat
- The Poor and Needy – people who can’t earn their basic necessities.
- The Collectors – These are the people who are given the duty of collection of Zakat from other people, however, they themselves can’t afford to live
- The New Converts – People who convert to Islam are also eligible as Zakat recipients as with their conversion to Islam they need assistance and help for a new start in life.
- To Free Slaves – The money of Zakat can also be spent on freeing the slaves as well.
- For Travelers – Zakat can also be given to the travelers and wayfarers as they might need the money when it comes to travel arrangements.
- To Help Someone Pay Debt – Those who are in debt and can’t afford to pay it off on their own are also eligible for Zakat.
The easiest way to calculate your Zakat is to find out the monetary value of each type of wealth and then work out 2.5% of the total sum.