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FAQ’s about Zakaah

Dear Brothers and Sisters in Islam,

السلام عليكم ورحمة الله وبركاته

I am pleased to present to you this exhaustive and informative Frequently Asked Questions about Zakaah for your reference and records.

FAQ’s about Zakaah

The recipients of Zakaah

  • Who is eligible to receive Zakaah?

Allah Subhaanuwa Tha’aala has stated in

Al Qur’an Surah 9 Al Tawbah (The Repentance) or Bara’ah (The Disavowal), Ayat 60

which says

“Alms are for the poor and the needy, and those employed to aminister the (funds); for those whose hearts have been (recently) reconciled (to Truth);for those in bondage and in debt; in the cause of Allah. and for the wayfarer (thus is it) ordained by Allah, and Allah is full of knowledge and wisdom.”

 (Those mentioned here are:

(1) men who have been weaned from hostility to Truth, who would probably be persecuted by their former associates, and require assistance until they establish new connections in their new environment;

(2) those in bondage, literally and figuratively; captives of war must be redeemed; slaves should be helped to freedom; those in the bondage of ignorance or superstition or unfavourable environment should be helped to freedom to develop their own gifts;

(3) those who are held in the grip of debt should be helped to economic freedom;

(4) those who are struggling and striving in Allah’s Cause by teaching or fighting or in duties assigned to them by the righteous Imam, who are thus unable to earn their ordinary living; and

(5) strangers stranded on the way. All these have a claim to charity).

There are eight categories of people who have the right to receive Zakaah:

  • People who are in complete poverty and have nothing.
  • People who have some wealth, but not enough to meet their basic needs.
  • The people who collect Zakaah to distribute to the poor and needy.
  • People who are sympathetic towards Islam or wish to enter to Islam, and are needy.
  • Zakaah may be used to free a person from slavery.
  • Zakaah can be given to those who are in debt and unable to pay off their debt.
  • The people who work in God’s way and strive to give Da’wah.
  • Travellers and/or wayfarers who are needy.

 

  • Am I allowed to give my Zakaah to my family members?

Zakaah can only be given to people who fall into the categories stated in the Quran (chapter 9, verse 60). Thus, if family members come under these categories, then you are able to give them Zakaah. However, if the family members are dependent upon you, then you are not able to give them Zakaah.

  • Can I give Zakaah to those who are in Debt? 

Yes, those in debt who are unable to pay off their debt are eligible to receive Zakaah as stated in the categories of people who have to right to receive Zakaah (Quran: chapter 9, verse 60).

  • Can I pay my Zakaah directly to individuals?

Zakaah may be given directly to the individuals who are eligible to receive it, or otherwise you can give your Zakaah to the organisations who work to distribute Zakaah. The contributor should use his/her best possible judgement to find the most deserving beneficiaries based on the eight categories.

  • Am I allowed to spread my Zakaah money between different charities?

Yes you can, as long as you ensure that the charities you donate to will distribute your Zakaah to the eligible recipients.

The conditions of Zakaah

  • What does Nisaab mean?

Nisaab is the minimum amount of wealth required to make a person liable to pay Zakaah. Nisaab is the equivalent to 87.5g of gold (or 7.5 tola/bori/vorii) in its current monetary value.

  • How is Nisaab calculated?

The value of gold changes every day, so it is best to check on the day of calculation, to get the most accurate value. Whatever is the value of 87.5g of gold (or 7.5 tola/bori.vorii) is the Nisaab for that day.

  • How much money must one have before they are liable to pay Zakaah?

A person must own either the equivalent of the Nisaab value or more, for a complete lunar year before they are liable to pay Zakaah.

  • Do I need to make an intention to pay Zakaah?

Yes, Zakaah is an obligation and the validity of it depends on the intention made by the person whose pays it.

  • How is Zakaah calculated?

Zakaah is calculated as just 2.5% of a person’s total wealth, provided that the person is the owner of wealth which totals or is higher than the Nisaab.

  • How is one lunar year measured?

The Islamic calendar consist of 12 lunar months, and the year lasts for 354 or 355 days. With respect to Zakaah, every individuals Zakaah year can start at different times and they must calculate one complete lunar year from the first day that they become the owner of Nisaab.

  • I have already paid a lot of money to charities. Does this count as my Zakaah?

If the money that has already been donated to other charities, was donated with the intention of Zakaah, then this will Insha Allah be counted as Zakaah. However, if the intention of paying Zakaah was not made, then the previous donations will be counted as Sadaqah and Zakaah is still payable, with the correct intention.

  • Does a single mother have to pay Zakaah?

Zakaah is an obligation upon every sane, adult Muslim who possesses equal to or more wealth than the Nisaab. Therefore, if the single mother’s wealth meets the Nisaab, then yes she must pay Zakaah.

  • Even though Zakaah is only 2.5%, am I allowed to give more?

Zakaah is just 2.5% of a person’s total wealth. Muslims however, often donate much more than this because Allah has emphasised the rewards of donating to charity many times, in the Holy Qu’ran. The extra money that is given to charity is counted as Sadaqah.

Dates of paying Zakaah

  • Does Zakaah have to be paid only during Ramadan?

It is not necessary for Zakaah to be paid only during Ramadan; it must be paid when it becomes due. If a person’s Zakaah becomes due during Ramadan, then they are eligible to pay it during the Holy month, however if it becomes due at any other time of the year, it is not permissible to delay paying Zakaah.

  • When do I need to pay my Zakaah?

Zakaah becomes due when an individual has been the owner of the Nisaab for one complete lunar year. Zakaah is an obligation and it should be paid as soon as it becomes due. The date for paying Zakaah will be different for different people.

  • Am I allowed to pay my Zakaah early?

Yes, if you know that you will be liable to pay Zakaah in the following year, then you can pay it in advance if you wish to. This can be done in monthly instalments for convenience.

  • Can I donate my Zakaah monthly?

Yes, a Muslim can spread their Zakaah throughout the year, provided that the final monthly payment goes through either before or on the day that Zakaah is due for that year. Regular giving is beneficial to both the person giving and the person receiving. Those in need can be supported regularly throughout the year.

Items for which Zakaah is payable

  • What kinds of things do not require paying Zakaah on them?

Zakaah does not need to be paid on possessions such as clothes which are for personal use, food which is for individual or family consumption or the home in which you reside.

  • Should I include wealth for which I have already paid Zakaah in previous years?

Zakaah must be paid every lunar year. If an individual possesses wealth at the Nisaab value for one year, they must pay Zakaah for this. Then, if the following year they are still in possession of the same wealth, then they must pay Zakaah for this again.

  • Can my spouse and I pay our Zakaah jointly?

Zakaah is an individual obligation; every person is to pay Zakaah for their own wealth. One must calculate their own wealth and compare it with the value of the Nisaab for that day; and then pay Zakaah accordingly if they are eligible to pay.

Zakaah on Inheritance

Do you have to pay Zakaah on inherited money?

 

Yes, the money which you have inherited becomes part of the wealth for which you need to pay Zakaah. It should be added to the existing wealth which you possess and then 2.5% of Zakaah should be paid on the total amount.

  • I received a large sum of money before my Zakaah was due, do I need to put this into my calculations?

Yes, you will need to include this sum of money for your calculations as it counts as part of your savings and is now a part of your wealth.

  • Can I use inheritance money to pay for Zakaah?

Zakaah has to be paid from a person’s wealth. So, if a person has inherited money then this is considered as their wealth. Thus, that person is allowed to pay Zakaah from this part of their wealth if he/she chooses to.

Zakaah on Property

I own a holiday house that’s not rented. I go occasionally on holiday and use the house. Do I have to pay Zakaah on the house?

If the property is for your personal use only and you do not generate any income from it, then you do not need to pay Zakaah for it.

  • Do I pay Zakaah on my house and car?

No, Zakaah does not need to be paid on the house and car which you use personally.

  • I bought a house a few years which was for the purpose of renting, then later I sold it – how do I pay Zakaah on this?

Buy to Rent: If one owns a home for rental purposes, then Zakaah is payable upon the rent with the deduction of any outgoings in connection with the property. The rental income which is generated should be included with the total wealth of the individual who is paying Zakaah.

Buy to Sell – Full ownership: If you own 100% of the property, then you must pay Zakaah for the full value of the property.

Buy to Sell – Part ownership: If you have not paid off the full mortgage, Zakaah is payable upon the percentage of the property that is owned to date. So, if at the time of paying Zakaah the individual has only re-paid part of the mortgage, e.g.: if someone has paid off 40% of a Rs 100,000 mortgage, then he/she must pay Zakaah on Rs 40,000.

  • If I am poor but my property is worth more than the value of Nisaab; do I still have to pay Zakaah?

No, because this is the property in which you live.

  • My house is converted into two flats. I live in one flat and I rent the other; how do I pay Zakaah for this?

You will need to pay Zakaah for the rental income which you gain from the flat that is rented out, provided that you own that money for one complete lunar year. You will not need to pay Zakaah for the flat in which you live.

Zakaah on Jewellery

 I only possess gold and/or silver which is equivalent to the value of the Nisaab, but I do not have money; do I still need to pay Zakaah?

Yes, as you possess enough wealth to be considered eligible to pay Zakaah, even though it is not in the form of cash. You should sell a portion of your jewellery so that you can acquire the cash to pay your Zakaah.

  •  I have gold jewellery which I use; do I have to pay Zakaah on this jewellery?

According to the Hanafi school of law (Madhab), Zakaah must be paid on all the jewellery which is owned, provided that the total value of wealth is equivalent to the Nisaab for one complete lunar year. Other Madhabs state that Zakaah is not due for jewellery that is for personal use.

  • I have a mixed range of jewellery, how do I pay my Zakaah for this?

Zakaah is due on all jewellery that consists of equal to or more than 50% gold.

Zakaah on Businesses

 Are fixed assets used in business subject to Zakaah?

No, a fixed asset is something which does generate income. Items such as store fixtures, computers, tables, even buildings or machinery that are not generating income but merely housing or running one’s business are all exempt from Zakaah.

  • I have a business, half of the shares are mine and the other half is my partner’s shares. I am a Muslim and my partner is a non-Muslim; how do I pay Zakaah for my shares?

Zakaah is compulsory for Muslims, so you must calculate the value of the shares which you own and pay Zakaah on this only.

  • I have my own business – how do I pay Zakaah on this?

Zakaah is payable on the sale value of all trade goods of the business. Anything that is essential for the running of the business such as vehicles, machinery and the building itself will be exempt from Zakaah.

Zakaah on debt and loans

I am in debt, do I still have to pay Zakaah?

Short term debt: Short term debt is one that you need to pay within your Zakaah year, and payments for this debt need to be deducted from your savings before you calculate your total wealth.

Long term debt: Long term debt such as a mortgage should not be deducted in full when calculating your total wealth, as this is something which will continue for many years. Rather you should deduct only the amount you will need to pay within your Zakaah year.

  • I lent some money to a friend who is poor and I did not expect to get the money back. He has now paid me back, is this money liable for Zakaah?

If the money has been returned, then it is now in your possession and therefore is counted as part of your wealth. Therefore you will need to include this in your Zakaah calculations.

  • When a debt is involved, who is responsible to pay the Zakaah on it, the lender or the debtor? Is the debt even subject to Zakaah?

Good debt: When the lender expects that the debtor is willing and capable of paying back the loan, then this is referred to as good debt and the lender should pay Zakaah for the money because he/she is still the owner of this money.

Bad debt: A bad debt is one where there is no hope of receiving repayment because the debtor is insolvent or he denies the debt and there is no proof of it. In this case, the lender does not need to pay Zakaah for this money.

  • I have lent some of my money to other people. When my Zakaah was due I realised that I didn’t have enough money to pay it on time, but I know am going to receive money later on from people that owe me but not on time. What do I do?

Paying Zakaah on its due time is obligatory. When Zakaah falls due and the giver of Zakaah is ready and able to pay it, it is not permissible to delay the payment. But if the money to be paid is not in hand, one may be granted respite until he gets the money and pays Zakaah.

Zakaah payments by the unemployed

 Do I have to pay Zakaah if I am unemployed?

If one has lost their job but still meets the requirements of Nisaab, then they should pay Zakaah as it is obligatory upon all Muslims that meet the minimum requirements. If they don’t meet the Nisaab then they are not obliged to pay Zakaah.

  • How much Zakaah will I have to pay if I am financially unstable and have no one to pay for me?

If a person meets the requirements of Nisaab, i.e. that they have possessed wealth equal to or above the Nisaab value for one complete lunar year, then they are eligible to pay Zakaah and should pay it.

Zakaah on grants and benefits

 Can EMA or bursary money from schools and colleges be used to pay for Zakaah?

EMA and bursaries are given to cover expenses, so if after the expenses have been covered but there is still money left over and the person’s total wealth meets the value of Nisaab, then they must pay the Zakaah.

  • Can I use grants from universities to pay for Zakaah?

Similar to bursaries, grants from universities are given to cover costs/expenses of university life. But, if after the expenses have been covered there is some money left, then they must pay the Zakaah, provided that the person’s total wealth meets the value of Nisaab.

  • Can benefits(PF, Pension) be used to pay for Zakaah?

Benefits(PF, Pension) from the government become a person’s disposable income and sometimes can also form part of their savings. Therefore, benefit money can be used for Zakaah payment as long as the Muslim’s total income is equal to or above the Nisaab requirement at the end of one lunar year.

  • Can I use my student loan to pay for Zakaah?

Money received from the LEA in the form of a loan should not be considered part of a Muslim’s wealth because this money has to be paid back. As it is not considered part of the wealth, it shouldn’t be included in Zakaah calculations.

Zakaah on saving and tax

 

I am saving money to perform Hajj; do I still need to pay Zakaah on this?

Yes, Zakaah is payable on money saved for Hajj, provided it is kept for one lunar year and is at or above the Nisaab threshold. This will also be the case for any money saved for marriage, a holiday or car, etc.

  • Do I need to pay Zakaah on a pension fund?

A person needs to pay Zakaah on their pension which they receive after retirement, provided that they are considered Sahib-un-Nisaab (owner of wealth). People, who are currently earning and have a percentage of their salary paid directly into a pension fund by their employer, do not need to pay Zakaah for this money yet, as they do not have access to it until after retirement.

  • Do I use money that I have earned interest from in the banks as part of my Zakaah calculation?

No, Riba (interest) is not permissible in Islam and interest money cannot be used to pay Zakaah, but it can be given as charity.

  • Can tax paid be intended as Zakaah, as some money is used for the benefit of Muslims?

The Islamic obligation to pay Zakaah cannot be connected with the paying of tax. Zakaah is an act of worship and its recipients are specified by Allah.

  • My friends and I have set up a Waqf fund, is this liable to Zakaah?

The general rule to a Waqf fund is that it is not liable to Zakaah.

Unpaid Zakaah

I owe several years of Zakaah. How do I rectify this?

For each year that you owe, you will need to take 2.5% of the total value of your wealth at the end of each year and pay that as Zakaah. If you are unsure how much wealth you had, you will need to estimate it to the best of your ability.

Zakaah Ul-Fitr (Fitrana)

What is Zakaah Ul-Fitr?

Zakaah Ul-Fitr is essentially the purification of fasting. Every Muslim is required to pay Zakaah Ul-Fitr. If the person is the primary earner of the family then they should pay Zakaah Ul-Fitr on behalf of all their dependents.

The minimum that is required would be the value of 2kg of flour, wheat, barley or rice from each person in the household; this is approximately Rs 50 per person (Please check exact amount with your local Masjid). Those eligible to receive Zakaah Ul-Fitr are the same as the recipients of Zakaah.

  • What is the difference between Zakaah Ul-Fitr and Zakaah?

Zakaah Ul-Fitr is due for all Muslims, where the head of the house will be required to pay on his or her dependents, at a rate of a minimum of Rs 50 per person (Please check exact amount with your local Masjid), before the Eid prayer.

Zakaah is only payable by Muslims that meet the required Nisaab and is calculated at 2.5% of accumulated wealth held for one complete lunar year.

  • When should I pay Zakaah Ul-Fitr, before or after Eid prayer? 

Zakaah Ul-Fitr ideally should be paid in advance of the Eid prayer so that enough time is given for the money to be distributed to the poor, ensuring that they are able to enjoy their Eid.

  • ” Those who spend their wealth [in Allah ‘s way] by night and by day, secretly and publicly – they will have their reward with their Lord. And no fear will there be concerning them, nor will they grieve.Al Qur’an Surah 2. Al Baqara (The Heifer) Ayat 274.

Please Share with all Muslim brethren in your contacts. جزاك اللهُ خيراً

في امان الله

Your brother in Islam

A Shabbir Ahmed

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