Zakat is one of the major religious duties in Islam. Literally, zakat means to “purify”. It refers to the purification of a believers’ wealth and soul. Wealth purification denotes the mobilization of assets for the purpose of financial growth and justified distribution. Purification of the soul implies freedom from hatred, jealousy, selfishness, uneasiness and greed. Other Quranic connotations also include the purification of sin.
Zakat is a fixed proportion collected from the surplus wealth and earnings of a believer. It is then distributed to prescribed beneficiaries and for the welfare as well as the infrastructure of a society in general. This contribution is made payable by a Muslim once every year.
Zakat is paid on the net balance after a Muslim has spent on basic necessities, family expenses, due credits, donations and taxes. Every Muslim male or female who at the end of the Hijri year is in possession of the equivalent of 85 grams of gold or more in cash or articles of trade, must pay his or her zakat at the minimum rate of 2.5 percent.
Zakat has a deep humanitarian and social-political value. This religious act prevents the hoarding of wealth and advocates solidarity with humanity because excessive wealth is distributed amongst the poor. The paying of zakat also helps purify one’s soul and encourages a person to have gratitude towards God’s bounties.
Zakat is mentioned along with Salat (prayer) in 30 verses of the Quran. It was first revealed in Surah 73:20;
“…. and establish regular prayers and give regular charity; and loan to Goda beautiful loan. And whatever good ye send forth for your souls, ye shall find it in God’s presence, Yea, better and greater in reward and seek ye the grace of God: for Godis oft-forgiving, Most Merciful.”
In another verse, God declares that those who pay zakat, are included within the Muslim society
“But (even so), if they repent, establish regular prayers, and practice regular charity, they are your brethren in Faith: (thus) do We explain the Signs in detail, for those who understand.” (9:11)
God says in the Quran:
“They were enjoined only to worship God, sincere in their faith in Him alone – and of upright religion – and to establish the Salat and the Zakat. Such is the upright religion, (98:5)
“Those who lay up treasures of gold and silver and spend them not in the way of God; give them the news of a painful punishment, on the Day when that (wealth) will be heated in hellfire, and their foreheads and their sides and their backs branded therewith: “This is the treasure which you laid up for yourselves! Taste, then, your hoarded treasure!” (9:34-35).
“Let not those who are miserly with what God has given them of His bounty think that this is good for them. Rather, it is bad for them. That which they withhold shall be hung around their necks on the Day of Arising. (3:180)
Bukhari and Muslim relate on the authority of Ibn Abbas that the Messenger of God sent Mu’adh to the Yemen he told him, “You are going to a people who have a Scripture, so call them to testify that there is no deity but God, and that I am the Messenger of God. If they respond to this, then teach them that God has imposed five Salats upon them in every day. If they respond to this, then teach them that God has imposed upon them a charity to be taken from the wealthy amongst them and given to their poor. If they respond to this, then beware of taking any more of their wealth! Beware also of the prayer of the oppressed, for there is no veil between such a prayer and God.”
Then he recited the verse: “Let not those who are miserly with what God has given them of His bounty think that this is good for them. Rather, it is bad for them. That which they withhold shall be hung around their necks on the Day of Arising.” (3:180)
Conditions for Zakat
Several conditions must be fulfilled before zakat can be paid. These conditions are necessary as zakat can only be applied on those who are of legal age and who own enough assets. These conditions are categorized into two broad categories, namely performer and asset.
Every Muslim who is of a certain age and owns enough assets is required to pay zakat.
Full Ownership A Muslim will only be required to pay zakat if he or she has full and legal ownership of an asset.
Zakat is payable only on those assets that are acquired for the purpose of creating or generating wealth. Some examples of this type of assets are livestock or crops that are traded or sold, inventory of goods used for trading, and investments such as gold or securities that have potential for appreciation in value. However, zakat is not payable in the case of fixed assets such as buildings, if they are not subjected to “capital circulation”.
Assets that exceed a minimum value
Zakat need only be paid on those assets that exceed a minimum value. This minimum value is calculated based on the market price of 85 grams of gold or 595 grams of pure silver. This minimum value is termed Nisab. The Islamic Fiqh and Research Councils, as well as Jumhur (majority) of Ulama’ recommend that gold be used as the basis for the calculation of nisab.
Completion of Haul
Haul is defined as the completion period for a zakat asset. The length of time for haul is one Islamic or Hijri year (1 year Hijri = 354.5 days, 1 year Solar = 365.25 days). Zakat is only payable on assets that have been held for at least this period.
Beneficiaries of Zakat
The Holy Quran (9:60) classifies the due recipients of zakat under the following eight categories.
“Zakat is for the poor, and the needy and those who are employed to administer and collect it, and the new converts, and for those who are in bondage, and in debt and service of the cause of God, and for the wayfarers, a duty ordained by God, and Godis the All-Knowing, the Wise”.
Zakat can only be distributed to any of the eight eligible beneficiaries (asnaf) that are mentioned in the Quran in Surah Taubah:60. However, priority should be given to the poor and needy. Where there is no central authority to administer zakat, it can be paid directly to the needy.
“Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to the truth); for those in bondage and in debt; in the cause of God; and for the wayfarer: (thus is it) ordained by God, and Godis full of knowledge and wisdom.” (9:60)
1. The poor (Faqir/Fuqara)
Those without any means of livelihood and material possessions.
2. The needy (Miskeen)
Those without sufficient means of livelihood to meet their basic necessities. For instance, those who, although may have a job, a house and a car, but whose income is below the minimum requirement.
3. The administrators of zakat (Amil)
Those appointed to manage and administer zakat. This category is sub-divided into the following categories:
Group of people who go out to the society and determine those who fall Fuqara and Miskeen categories.
Those who collect the Zakat money.
The accountant of the Zakat money.
The administrator, manager, clerical worker or secretary who puts the files in order.
Those who handle Zakat distributions.
The auditor who audits overall Zakat management and administration.
4. The sympathizers (Muallaf-at-Quloobuhum)
Those whose hearts are inclined towards or have accepted Islam.
5. To free slaves (Riqab)
Zakat can also be used to free slaves or captives.
6. Those who are in debt (Gharimin)
Zakat can be used to pay off the debts of a person who has borrowed to pay for basic necessities so that he/she can lead a normal life. Zakat can also be distributed to those in financial difficulties e.g. bankruptcy due to the loss of employment and heavy debt.
7. For the cause of God (Fisabillillah)
Zakat can be used to finance any form of struggle or work for the love of God. The following examples fall under this category, e.g. Da’wah; building & developing society’s infrastructure; defending Muslims, who are being oppressed; assisting poor travelers and sponsoring a student’s educational expenses.
8. Those who are stranded during a journey (Ibnus Sabil)
Zakat can also be used to help a traveler facing difficulties in continuing his journey due to reasons such as loss of money or the break down of his vehicles, the repair of which he cannot afford.
The Prophet said, “If someone gives as charity so much as the equivalent of a single date from honest earnings – and God accepts only what is honest – God takes it in the Right Hand, then makes it increase for the one responsible, just as one of you raises foal, until it becomes as big as a mountain.