Agency and Zakah

A Guide to Zakah - Understanding & Calculation, Fiqh

One is not obliged to distribute the Zakah by himself to the entitled recipients. He may validly appoint an agent (whether natural person or organization) to pay the Zakah on his behalf.

In appointing such an agent, the Zakah payer must bear in mind that the Zakah obligation is not discharged if the agent fails to distribute the Zakah to the entitled recipients. At the same time, possession of the Zakah amount by the agent will be deemed to be possessed by the principal (Zakah payer) as in the case of those organizations, who are guilty of serious maladministration by collecting Zakah and not distributing the same for a number of years without valid reason.

August 23, 2011

Some important points related to Zakat

A Guide to Zakah - Understanding & Calculation, Fiqh


For a common person (one who is not involved in livestock or agriculture) all that needs to be taken into account for Zakah calculation is the following:

The amount of cash owned (be it on person, in the bank, or loaned out. This can be money earned or income from additional house, properties etc.) as well as the value of any gold or silver jewelry owned, (necklaces, watches, etc. but not the gems or stones within them), and also, if one is involved in trade, then the value of one’s stock/merchandise at that time constitutes one’s accountable total.

August 22, 2011

Zakat on trading assets

A Guide to Zakah - Understanding & Calculation, Fiqh

Zakah is payable on trading stock if their market value is equal to or more than the value of nisaab.

Definition of trading assets

Trading assets are those, which are purchased with the intention of resale or capital gain. Consequently, goods that have been purchased for personal use and not for the purpose of trade are not subject to Zakah, irrespective of their value. Similarly, goods (other than gold and silver) originally bought for personal use are not subject to Zakah if the purchaser subsequently intends to sell them for trade and had not intended it at the time of purchase. Once sold, however, their sale price would be subject to Zakah.

August 21, 2011

Amount of Zakat

A Guide to Zakah - Understanding & Calculation, Fiqh

The amount of Zakah payable is two and a half percent (2.5%), or 40th portion of:

1. the value of gold and silver if it is equivalent to nisaab or above it.

2. trading stocks, or its value at the time of obligation of payment of Zakah, if the stock is equal to nisaab.

3. cash on hand if equal to nisaab.

Zakah on gold and silver

• Gold and silver are subject to Zakah regardless of whether they are owned for personal use or otherwise if the weight thereof equals the prescribed nisaab and one year elapses thereon. Gold and silver are also always liable to Zakah irrespective of the asset type (gold bar, jewellery, ingot, coin etc.)

August 20, 2011

Zakatable Assets

A Guide to Zakah - Understanding & Calculation, Fiqh

Allah Ta’ala has put the most minimum burden of monetary obligations on Muslims so that paying Zakah becomes convenient for every sahib-un-nisaab Muslim.

Firstly, it is not obligatory to pay Zakah on every asset. Rather only those assets are the subject matter of Zakah that have the potential of growth or increase. These assets may be broadly classified as follows:

1- Trading assets.

2- Cash & Cash Equivalent (like prize bonds, Travelers Checks etc)

3- Gold and silver

4- Livestock (goats, sheep, cows and camels)

5- Agricultural output.

August 19, 2011

Recipients of Zakat

A Guide to Zakah - Understanding & Calculation, Fiqh

The Holy Quran has fixed eight categories of recipients in verse 60 of the Surah Taubah.

“The Sadaqat (prescribed alms) are (meant) only to be given to the poor, the needy, to those employed to collect them, to those whose hearts are to be won, in the cause of the slaves and those encumbered with debt, in the way of Allah and to a wayfarer. This is an obligation prescribed by Allah. Allah is All Knowing, Wise.” (60)

There is a consensus amongst the jurists that the disbursement of Zakah is solely confined to these eight recipients. The Holy Prophet was once asked by a Companion to give the latter Zakah. The Holy Prophet replied:

August 18, 2011

Zakat on debts

A Guide to Zakah - Understanding & Calculation, Fiqh

Debts can be classified into two types:

  1. Receivables i.e. owed to oneself e.g. Loans given to somebody.
  2. Payable to others e.g. Money borrowed from somebody.

Debts receivable from others

There are different types of debt receivables. The ruling of Zakah for each kind of debt receivable is different from the other. It is therefore pertinent to first understand all these types of debts receivable.

Types of Debts Receivable

Imam Abu Hanifah (R.A.) has classified debts into three categories, namely:

  1. Trade Debts
  2. Non-Trade Debts
  3. Other Debts
August 17, 2011

Payer of Zakat and Nisab

A Guide to Zakah - Understanding & Calculation, Fiqh

Payer of Zakah

Zakah must be paid by the one who is:

1- Muslim

2- Major (Baligh)

3- Sane

4- Sahib-un-nisaab (owner of wealth above the level of nisaab)

Above-mentioned four conditions are described respectively in the following lines:

  1.  Zakah is not obligatory on a non-Muslim as Zakah is an ibadah (an act of pure worship) and a non-Muslim is not obliged to carry out the ibadah of Islam.
August 16, 2011

What is Zakat?

A Guide to Zakah - Understanding & Calculation, Fiqh

Lexically, the word Zakah covers two meanings.

1. Purification

2. Growth and increase

In the terminology of the Quran and Sunnah, Zakah is the portion of asset that is made mandatory to be spent in the ways specified by Allah Ta’ala.

Benefits of Zakah

Zakah has two straightforward benefits.

Firstly, the payer himself gets purified from inner germs of the spiritual diseases.

Secondly, Zakah helps those who are not able to fulfill their needs independently. For e.g. orphans, widows, handicaps, poor people etc.

Allah Ta’ala says in Surah Taubah:

August 15, 2011