Zakat

What is Zakat?

Zakat is one of the important pillars of Islam, which is sometimes referred to as al-sadaqa al-wajiba (obligatory alms). According to the Shariah, the person who possesses the required threshold which makes Zakat obligatory must give a specific amount of his wealth to those who are eligible to receive Zakat, according to their specific condition, so that their needs are fulfilled.


What are the conditions that make Zakat compulsory (fard)?

The following conditions must be fulfilled in order for Zakat to be compulsory (fard) upon an individual:

  1. One should be a Muslim: Zakat is not compulsory upon non-Muslims.
  2. One should be mature (i.e., above the age of puberty).
  3. One should be mentally sound: Zakat is not compulsory on those who are insane.
  4. One should be free (i.e., not a slave or in bondage).
  5. One should have complete ownership of the wealth: the 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.
  6. One’s wealth should exceed that which is required to fulfil the basic necessities of life.
  7. 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.
  8. 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.
  9. The total value of the wealth and property should be above the threshold determined by the Shariah.
  10. The person must have been above the Zakat threshold for a whole lunar year. One does not pay the Zakat as soon as one reaches the 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.

What is nisab?

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

What is the 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 weighed 87.48 grams.

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 the Holy Prophet [SAW] said,

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

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 must be noted that the Zakat due is equivalent to 2.5% either by weight or value.

Is Zakat payable on valuable stones and jewels?

If these valuable stones and jewels [i.e., other than gold and silver] are for the purpose of trading, then they are liable for Zakat. If however, they are used for one’s personal use, Zakat does not need to be paid on it, irrespective of its value.