Sunday, August 05, 2012

Basics of Zakat - How to Calculate and whom to give

Zakat is one of the 5 main Tenets of Islam, the others being :

1) Kalma / Shahada (testifying that there is only one God and Prophet Muhammed is His Final Messenger
2) Namaz (five daily prayers)
3) Zakat (Alms)
4) Roza (Fasting in the month of Ramzan)
5) Hajj (pilgrimage to Makkah by those who can afford)

It is Compulsory on every Muslim to pay Yearly Charity (Zakat). This can be spread out throughout the year (Islamic Calender begins with Muharram). Most people give it in the month of Ramzan as it is said the benefit (sawaab) of every act of kindness, goodness and charity is doubled in this Holy Month. Zakat is to be calculated @2.5% of all your income minus payables plus investments. Those who are in doubt on how to calculate, the simplest way to calculate is to add up all your savings lying in bank account/s, Fixed Deposits, Gold, Silver, Shares and other investments like extra unused house (minus loan payable, if any), land etc at current market rate and arrive at 2.5% of the value and Give away!

For those earning out of agricultural produce and owning livestock, the percentage is slightly higher and different.

Who is entitled to Receive Zakat ?

"The alms are only for the Fuqara' (the poor), and Al-Masakin (the needy) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allah's Cause, and for the wayfarer (a traveler who is cut off from everything); a duty imposed by Allah. And Allah is All-Knower, All-Wise." [Al-Quran 9:60]

These people are classified as follows :

1) Fuqaraa : Very poor people (destitutes)

2) Masakeen : People having basic property and other things of survival but leading a hand to mouth existence (needy).

3)AamileenRepresentatives of charity organisations or NGOs or representatives appointed by State in an Islamic nation (authorised Zakat collectors).

4)Muallafatul Quloob: Those poor and needy persons who are given Zakat with the intentions of solidifying their hearts because they maybe recently converted to Islam (as some of them might have been boycotted by family society and have no wealth / property)

5)Ar-Riqaab: Master of Slaves to buy their freedom (buying freedom of a slave). This was more prevalent in olden days

6)Ibnus-Sabeel: A traveler, who, whilst wealthy at his residence, is stranded and in need of financial assistance (Wayfarer)

7) Al Ghaarimeen: To pay someone's debt - A person whose debts exceeds his assets and his net assets (after deducting his liabilities) is below the Nisab limit. To determine whether a person qualifies, his basic necessities of life (house, furniture, clothes, vehicle, etc.) will not be taken into account

8)Fi Sabeelillah: Those who are away from home in the path of Allah. Those in some social cause, on a valid purpose, or travelling in search of knowledge or a stranded Haji may be assisted with Zakat if they are in need. 

Who cannot be given Zakat?

1) Zakat cannot be given to kith and kin like parents, grandfather, etc., or to one's children and grandchildren. A husband and wife cannot give Zakat to each other. It is farz (compulsory) for us to look after their needs. And fulfillment of their needs, though considered as 'Sadaqa' (charity) by Allah cannot be included in compulsory Zakat

2) Cannot be given to organisations which invest Zakat funds in property, shares and or to pay off salaries of their staff.

3) If one cannot determine whether the recipient is needy or not, then it is better to make enquiries before giving him / them Zakat. 

4) Zakat cannot be used for the Kafan (or burial expenses) of a deceased person who has no heirs, because at that time he/she cannot become the owner.

5) A dead person's debt cannot be paid from Zakat as he cannot directly benefit from it.

Remember that the first right on Zakat is of our poor relatives, then poor neighbours, then poor in our surroundings (this can include NGOs/ Orphanages or people doing social work in area) and then you may include bigger Charity groups. You need not give all to one person. First make a list of all needy people, groups, organisations known to you and wish to donate. Then decide whom to give how much and start donating... Keep a little contingency for near and far acquaintances or people who come to your place in Ramzan asking for Zakat.

Please click on link to find Zakat Calculator, which will give in detail how Zakat amount is arrived :

May Allah bless our earnings!

Also Referred