01. Zakat

 

What is Zakat?

Zakat is one of the five pillars of Islam and is a mandatory act of worship for Muslims who meet the financial criteria. Also known as Al-Sadaqa Al-Wajiba (obligatory alms), it involves giving a fixed portion of one’s wealth to those in need.

Who is obligated to pay Zakat?

Any Muslim who owns wealth above a certain threshold (nisab) for a full lunar year is required to pay Zakat. This involves donating a specific portion—typically 2.5%—of their qualifying assets.

Who is eligible to receive Zakat?


Zakat can be distributed to the following eight categories of people:

  1. The poor

  2. The needy (destitute)

  3. Zakat administrators

  4. Those whose hearts are to be reconciled (new Muslims or allies)

  5. Those in bondage (slaves or captives)

  6. People in debt

  7. Those striving in the cause of Allah

  8. Travelers in need (including refugees)

What are the conditions that make Zakat obligatory?

  • (Zakat is not applicable on non-Muslims).
  • Mature (i.e., above the age of puberty)
  • Mentally sound (Zakat is not compulsory on those who are insane).
  • Free (i.e., not a slave or in prison).
  • Complete ownership of the wealth (wealth can only be subject to Zakat if it is in complete ownership of the individual. For example, if someone buried some possessions somewhere and forgot where he had buried them, and then remembered years later, the Zakat will not have to be paid for the interim period when the possessions were missing.)
  • One’s wealth should exceed that which is required to fulfil the basic necessities of life.
  • One should be free of debt. For example, if someone has £1000 saving, but he also has a debt of £1000, he is not liable to pay the Zakat, so long as his savings do not exceed his debt.
  • Zakat is payable on that wealth or property which grows either materially, such as trade goods or free-grazing livestock, or in value, such as gold or silver.
  • Total value of wealth and property should be above threshold determined by Shariah.
  • Person must have been above Zakat threshold for a whole lunar year. One does not pay Zakat as soon as one reaches threshold; rather a whole lunar year has to pass before one pays the Zakat on the condition that one still above the threshold one year on.
02. Nisab

What is Nisab?

Those assets, wealth, and property upon which it is compulsory to pay Zakat must pass a threshold in order for Zakat to become obligatory on a person. This threshold is known as ‘Nisab’.

What is the Nisab of Silver?

Zakat becomes obligatory if someone is minimally in possession of 612.36 grams of silver. One-fortieth (1/40) of the total amount should be paid as Zakat. Abu Sa`id al-Khudri states that Holy Prophet [SAW] said,

There is no Zakat upon any silver that is less than five awqiya (612.36 grams) [Bukhari, #1390].

What is Nisab of gold?

Zakat becomes obligatory if someone is in possession of 87.48 grams of gold. `Ali b. Abi Talib narrates that the Holy Prophet [SAW] said,

It is not compulsory upon you, i.e., on gold, until you are in possession of 20 dinars. When you have 20 dinars and a whole year passes, then half a dinar becomes obligatory on it, and whatever exceeds it, then it is in accordance to the excess (i.e., 1/40) [Abu Dawud, #1573].

It is narrated that `Abd Allah b. `Umar and `A’isha both narrate that the Holy Prophet (saw) used to take Zakat of half a dinar from 20 dinars, and one dinar from every 40 dinars (i.e., 1/40) [Ibn Majah, #1791]. It should be noted that in those days, dinars were gold coins and 20 dinars