Zakat

What is Zakat?

Zakat is the amount of money that every adult, mentally stable, free, and financially able Muslim, male and female, has to pay to support specific categories people. This category of people is defined in surah at-Taubah (9)verse 60:”The alms are only for the poor and the needy, and those who collect them, and those whose hearts are to be reconciled, and to free the captives and the debtors, and for the cause of Allah, and (for) the wayfarers; a duty imposed by Allah. Allah is knower, Wise.”(The Holy Qur’an 9:60).

The obligatory nature of Zakat is firmly established in the Qur’an,the Sunnah (or hadith), and the consensus of the companions and the Muslim scholars.Allah states in Surah at-Taubah verses 34-35:”O ye who believe! there are indeed many among the priests and anchorites, who in Falsehood devour the substance of men and hinder (them) from the way of Allah”.

Zakat is obligatory when a certain amount of money, called the nisab is reached or exceeded. Zakat is not obligatory if the amount owned is less than this nisab.

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What is Nisab?

To be liable for Zakat, one’s wealth must amount to more than a threshold figure, termed the “nisab”.

To determine the nisab, the are two measures: either gold or silver.

Gold: The nisab by the gold standard is 3 ounces of gold (87.48 grammes) or its cash equivalent. This is approximately £2567.31 (07/06/2016) but will vary with the current market value of gold. For the latest prices, refer to the Online Zakat Calculator.

Silver: The nisab by the silver standard is 21 ounces of silver (612.36 grammes) or its equivalent in cash. This is approximately £217.69 (07/06/2016)

Example: In 1423 AH, Suraya’s Zakatable wealth came to only £200. She owes no Zakat. The next year was better for her, and she now owns £2,500 in Zakatable wealth. She will be liable for Zakat after the money has been in her possession for a lunar year.

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Should I use the gold or silver nisab?

The nisab calculated with the silver standard is significantly lower than its gold counterpart. This is because the value of silver has plummeted since the time of the Prophet (Allah bless him and give him peace).

There are arguments for using either nisab value – many scholars say that it is better to use the silver nisab since it will increase the amount of charity distributed, others say that the gold nisab is closer to the nisab in use at the time of the blessed Prophet (Allah bless him and give him peace).

However, if your assets consist entirely of gold, you must use the gold nisab, and similarly, if they consist entirely of silver then the silver nisab must be used.

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My wealth decreased below the nisab for a few months during the year, do I still pay Zakat?

As long as you are in possession of wealth above the Nisab threshold at the beginning and end of the Zakat year, Zakat will be payable, even if your wealth dipped below the nisab for most of the year.

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I have more money than the nisab, but I need it for my living expenses.

If a person possesses wealth exceeding the nisab threshold, but has to pay rent, purchase food, clothing, etc., for himself and his dependants, then these costs may be deducted from one’s wealth.

If after deducting these costs, his remaining wealth is less than the nisab then no Zakat is payable.

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When does the Zakat year begin?

The Zakat year begins on the date on which you were first in possessions of wealth above the nisab.

This will be your seed date, whenever it comes around you will have to calculate Zakat, irrespective of any fluctuations in the amount of wealth in your possession.

The only situation in which your seed date will change is if you were to become totally bankrupt and lose all your assets and belongings. In this situation, your new seed date will begin when you are once again in possession of wealth above the nisab.

If you are not sure of your seed date, then estimate it to the best of your ability.