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 Quick Links 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.