Zakat in Islam-II

Zakat is a great obligation authorized by Almighty Allah for the purpose of maintaining solidarity among the Muslim community.

Conditions for Zakat: Zakat is obligatory on every Muslim who owns assets as his own, which are in his hand and at his disposal, or which he is able to collect. These assets must reach nisab (minimum value) set by Islamic law, which also varies according to the type of assets as previously mentioned, and that a full year lapses on its ownership. However, in the case of what comes out of land such as crops, then zakat is due when they become ripe, and in the case of grazing animals, young offspring are exempted from the nisab until they reach maturity.

Zakat is due on four kinds of wealth:

1. The grains and fruits that grow from the earth, according to the saying of the Almighty Allah “But pay the due thereof...” (their zakat is due, according to Allah’s orders, on the day of harvest...). (Al-Anam: 141)

2. Valuables like gold, silver and cash. Allah says in the Holy Quran “And those who hoard up gold and silver and spend them not in the way of Allah, announce to them a painful torment.” Al-Tawba (Verse 34):

3. Goods designated for trade, including all assets that are used for earning and trading, such as real estate, animals, equipment, merchandise, foodstuffs, vehicles and other types of assets. Their owner evaluates them according to their value, whether they depreciated or appreciated, and counts the merchandise in their stores accurately and comprehensively, small or big, and pays zakat on it.

4. Livestock: camels, sheep or goats, on condition that they are grazing and are prepared for breeding and they reach the nisab (minimum number). The grazing animals are the ones that graze on the grass all the year or most of it. If they are not grazing animals, there is no zakat on them unless they are for trade, and if they were prepared for profit by buying and selling, then they are merchandise, and the owner must pay their zakat as that of merchandise, whether they graze or not.

The zakat is paid if they reach the nisab of trade merchandise by themselves, or by adding them to his other assets.

Zakat rate according to nisab (minimum value) 1- Grains and fruits: The nisab is equal to 612 kg of good wheat. The amount due on it is one tenth (10 percent) of what the sky or springs watered, and half of one tenth (5 percent) of what was irrigated at a cost.

2- Cash or valuables:

a- Gold: The nisab is currently equal to 85 gm, and the amount due is a quarter of a tenth (2.5 percent).

b- Silver: The nisab is equal to 595 gm, and the amount due is a quarter of a tenth (2.5 percent).

c- Cash: The nisab is equivalent of the value of the nisab of gold or silver, and the amount due is a quarter of a tenth (2.5 percent).

3- Goods designated for trade: Their value is estimated at the nisab of gold or silver, which is 85 gm of gold or 595 gm of silver – the amount due is a quarter of a tenth (2.5 percent).

4- Animals:

a- Camels: the minimum nisab is five, and the amount of zakat for that is one sheep.

b- Cows: The minimum nisab is 30, which includes animals one year old or more, and the amount of zakat for that is tabbiaa (one of them which its age one year).

c- Goat and sheep: The minimum nisab is 40, and the amount of zakat for that is one goat.

d- Zakat on shares: If one takes his shares to buy and sell them, the zakat due on them is a quarter of a tenth (2.5 percent) of the market value on the day zakat is due, like goods designated for trade.

However, if he takes his shares to benefit from their annual proceeds, their zakat is as follows:

1. If he is able to know - through the company or others - the amount of each share’s zakat assets of the company, then he pays zakat on that amount at a rate of a quarter of a tenth (2.5 percent).

2. If the company has funds on which zakat is due, such as cash, trade goods, and debts owed by debtors who owe zakat, and it does not pay zakat on its funds, and the shareholder cannot know from the company’s accounts what zakat assets pertain to his shares, then he must investigate what he can and pay zakat on the zakat assets corresponding to his shares. This is unless the company is in such a large deficit that its debts absorb its assets. However, if the company does not have funds on which zakat is due, then it pays zakat only on the proceeds and does not pay it on the principal of the share.

Allah Knows best. We ask Him to enable us to meet our obligations to Him and to our community in a beautiful way.