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Q: 71 – Title: Can you guide me about Zakat? I mean we have to pay Zakat after completion of one year. What are the assets on which we have t o pay Zakat? What is basic rule for the payment of Zakat?
Question
Can you guide me about Zakat? I mean we have to pay Zakat after completion of one year. What are the assets on which we have t o pay Zakat? What is basic rule for the payment of Zakat?
Answer
In the name of Allah, Most Gracious, Most Merciful
Assalaamu 'alaykum waRahmatullahi Wabarakatoh
Allah Ta‘ala states in the Holy Quran,
وَأَقِيمُوا الصَّلَاةَ وَآَتُوا الزَّكَاةَ وَمَا تُقَدِّمُوا لِأَنْفُسِكُمْ مِنْ خَيْرٍ تَجِدُوهُ عِنْدَ اللَّهِ إِنَّ اللَّهَ بِمَا تَعْمَلُونَ بَصِيرٌ
“And establish Sal?h and pay Zak?h; whatever good you send forth for yourselves, you will find it with Allah. Certainly, Allah is watchful of what you do.”
Zak?h has two denotations in Arabic, namely growth and purification. Zakah is paid as a means of purifying one’s wealth and fulfilling the obligation will be a means of increase and growth in the remainder of one’s wealth.
Calculating Zakah:
Zakah will become compulsory on a sane and mature Muslim when his / her wealth exceeds the Nis?b and this amount of wealth is maintained for the duration of one entire lunar year. The Nisab is 20 Mithqals (87.479 g) for gold and 200 Dirhams (612.35 g) for silver. Any currency equal to the amount of any of these Nis?bs will also render Zakah binding. For example, if the price of silver is quoted at R4.40 per gram then the Nisab will equal approximately R2, 702. If one’s wealth decreases below the Nisab during the year but before the expiry of the year, it reaches the Nisab, Zakah will be binding contrary to the case of the wealth not rebounding to amount of Nisab upon the expiry of the year. However, if one loses his entire wealth, a new lunar cycle will begin after reaching the Nisab for the second time. All debts and liabilities will be deducted from his wealth before calculating his estate. Only that particular year’s liabilities will be deducted from long-term debts such as car / home financing. Loans given and other receivables into one’s estate will be accounted for even if the person is not paid by his debtor for several years. Any gold or silver items such as jewelry, ornaments etc will also form part of Zakatable assets. If the percentage of gold or silver in the item is more than the metal alloy with which it is amalgamated the entire item will be considered as gold or silver. If the percentage of alloy is greater, if there is enough gold or silver where it is possible for it to be extracted, then Zakah will be compulsory only on the value of the gold or silver therein and not on the entire item if the Nisab is reached. Similarly, any items purchased for trade will be subject to Zakah and must be accounted for in the calculation. A person should add his / her cash savings, values of gold and/or silver, value of the merchandise of trade and any receivables from debts etc. Thereafter, he / she should deduct the amount of debts owed to others. If the value of the net total equals the Nisab of gold or silver, he / she will have to pay 2.5% of the amount in Zakah. Hereunder is a brief chart illustrating the calculation of Zakah:
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Personal Wealth
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Amounts:
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1. Amount of Cash and Savings at home or in the bank
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R 10,000
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2. Current value of any gold and silver jewelry, coins, utensils etc
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R 5,000
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3. Value of assets and merchandise for trade
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R 20,000
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4. Receivables and loaned amounts to others
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R 5,000
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Total these amounts here:
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R 40,000
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Amount Debts to be paid:
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R 20,000
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Subtract the total amount of debts for the year from the above amount.
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Nett Total of Zakatable Wealth
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R 20,000
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if the net total of Zakatable Wealth is more than the Nisab amount then…
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Multiply the nett total by 2.5% (nett amount x 0.025)
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R 500
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And Allah knows best
Wassalam
Ml. Yusuf bin Yaqub,
Student Darul Iftaa
Concurred by:
Ml. Ehzaz Ajmeri,
Student Darul Iftaa
Darul Iftaa, Madrassah In'aamiyyah
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