When should Zakat be paid?
Once a person reaches the nisab and a lunar year (hawl) has passed by, then zakat is due immediately.
What assets are not liable for zakat?
• Your home
• Car (s) owned for personal use
• Rental properties
• Jewelry not containing gold or silver (e.g. diamonds, precious stones, etc.)
• Furniture and household goods for use.
However, trade goods (any product obtained for the purpose of selling at a profit) are liable for zakāt at the nisab of 85 grams of gold. Your goods should be priced at the current wholesale price at the time of giving zakāt. Fixed assets such as buildings, furniture, machinery which are not acquired for sale, are not subject to zakāt.
What happens if the nisab fluctuates during the year?
In some cases one’s zakatable wealth may dip below the nisab throughout the year. In such cases of uncertainty, it is preferable for one to take the value of one’s zakatable assets at the beginning and end of the lunar year. If both values were above the nisab then zakat would be due.
Should we pay Zakat based on the value of gold or silver?
Many scholars prefer that one should pay zakat based on silver (the lower value). This is due to a greater number of people fulfilling Zakat and hence being more beneficial to the poor and needy. However, if your only asset is gold, then the gold Nisab figure has to be used.
Where should Zakat be distributed?
The preferable option is to distribute zakat locally. Alternatively, one may give zakat to one of the eight categories defined in the Qur’an anywhere in the world. Where they feel there is a particular benefit (maslahah) and their contribution would be more beneficial (e.g. recipients in extreme poverty, insufficient local donations, increased demand due to natural disasters, war etc.). One can also apportion their zakat to give some locally and some abroad.
What does one do about Missed Zakat payments?
If one has missed zakat payments over the years, then one must make a calculated estimate of the zakat missed for each year and discharge it accordingly. These payments are still binding on him even if many years have passed by and he did not know they were obligatory.
Is zakat due on worn Jewlery ?
There is a difference of opinion on whether Zakat is due on gold/silver, which is for personal use. Some Companions including ‘A’isha (radi Allahu anha) hold that zakat is not due on these items on the premise that is a personal item (like clothes and other household goods) and hence would fall under items that are not zakatable. However, if the jewellery is used as a storage of value, then it is liable for zakāt. Also if the amount of jewellery is excessive, then it no longer treated as an item for personal use, and hence is liable for zakāt. Other Companions including Ibn Ma’sood hold that zakāt is payable on all jewellery. This is the safest opinion.
How do I measure how much gold and silver I have?
It is advised that you visit a local jeweller and ask them to value your jewellery for you.
Are any debts which are owed to me zakatable?
The scholars differentiate between a debt in which one is confident of repayment and one, which is not. If the creditor is confident the debtor will pay when he is asked due to having the financial ability, then the creditor must include this in zakat payment. If however, the debtor is struggling and one is not confident he can pay when requested to, then this amount does not have to be calculated as part of zakat.
What are the zakatable assets?
1. The poor (al-fuqarâ’)
meaning low-income or indigent: This can mean a homeless person in your area, kids whose families qualify for free or reduced-price lunches, or orphans in Bangladesh. Anyone who does not have the funds to live a stable life, feed themselves and their family, go to the doctor when they need to and grow up to be a productive citizen falls under this category.
2. The needy (al-masâkîn)
meaning someone who is in difficulty: Someone in need might not necessarily be poor, right? Some people are forced from their homes by war or natural disasters. Or imagine a mother who gets sick and cannot take care of her children. Even with money in the bank, they may still need help. Your zakat can be there for them.
3. Those in charge of distributing the zakat
It includes people who manage zakat funds whether in charitable organisations, masajid or in other institutions. If an Imam is involved in collecting Zakat funds, he can also be qualified to receive from such collections. It is important that only a reasonable amount is taken for this cause and it is not abused.
4. Those whose hearts are to be reconciled
meaning new Muslims and friends of the Muslim community: You read that right. Your zakat can be distributed to new Muslims, and to people in the larger community. This not only exemplifies the Muslim tradition of social justice for all, but shows reverts how important they are, and helps build bonds of cooperation and friendship between Muslims and non-Muslims.
5. Those in bondage
(slaves and captives): Even though slavery is outlawed in most parts of the world, many people are still trafficked, meaning bought and sold, as slaves. Using zakat to help any of these people become free and independent again seems like a no-brainer.
6. The debt-ridden
Yes, zakat can help people pay their debts. Living with a great burden of debt can be debilitating to an individual or family, but your zakat can help.
7. In the cause of God
This includes funding for dawah, Islamic propagation and media, Islamic institutes and universities, funding students of knowledge and supporting teachers preaching Islam and calling to goodness. It also includes any project or worthy cause that is directly involved in working in the broader meaning of the path of Allah.
8. The Wayfarer
meaning those who are stranded or traveling with few resources: Whether a refugee who is fleeing violence in a distant country or a motorist stranded on the side of the road, God has designated that anyone who is away from home, out of cash and in need of help is eligible to receive your zakat.
The ruling on Zakat
Zakat is a compulsory act of worship that requires a Muslim who owns wealth equal to or above the Nisab (pre-defined threshold) to donate 2.5% of their wealth to eligible recipients.