Zakat can be paid in kind from the same merchandise on which it is due it means Zakat on gold can be paid from the gold itself.

In the name of Allah the Most Gracious, The Most Merciful.

Assalaam alaikum,

The amount of wealth which makes one liable for Zakat is called Nisaab. The Nisaab as fixed by Prophet Muhammad (P.B.U.H) is as follows:

Gold = 87.48 Grams = 7.50 Tolas = 1350 Grains = 2.8125 Troy Oz

Silver = 612.36 Grams = 52.50 Tolas = 9450 Grains = 19.6875 Troy Oz

Nisaab of cash, stock or bonds, other cash assets is the equivalent amount of Gold or Silver. Nisaab is calculated by adding up the cash value of all the assets such as gold, silver, currency etc. and if it is equal to or in excess of the minimum Nisaab as specified in the above table, the Zakat is due at the rate of 2.5%.

The payment of Zakat is compulsory on the excess wealth or assets which is equal to or exceeds the value of Nisaab, and which is possessed for a full Islamic year. If such wealth decreases during the course of the year and increases again to the value of Nisaab before the end of the year, the Zakat then must be calculated on the full amount that is possessed at the end of the year.

DISTRIBUTION OF ZAKAT:

1- Zakat should be given as soon as possible after it becomes due.

2- All of the Zakat can be given to one person or to several persons.

3- A poor man cannot be paid for his work from Zakat nor can Zakat be given in payment of services, except to the people appointed by the Islamic government to collect Zakat.

4- Zakat will only be valid if the recipient is made the owner of that amount. If, for example, a few needy persons are fed a meal from Zakat money, then Zakat will not be fulfilled as they were not made owners of the food.

5- Zakat cannot be given for the construction of Masjid, Madrasah, Hospital, a well, a bridge or any other public amenity.

6- Zakat can be paid in kind from the same merchandise on which it is due, or alternatively, it could be paid in cash.

Zakat is obligatory upon a person if:

1- He or she is an adult, sane, free and Muslim.

2- He/she must possess wealth in excess of specified minimum (Nisaab) excluding his or her personal needs (clothing, household furniture, utensils, cars etc. are termed article of personal needs).

3- It should be possessed for a complete lunar year.

4- It should be of productive nature from which one can derive profit or benefit such as merchandise for business, gold, silver, livestock etc.

TYPES OF WEALTH ON WHICH ZAKAT IS IMPOSED:

1- Gold and silver, in any form.

2- Cash, bank notes, stocks, bonds etc.

3- Merchandise for business, equal to the value of Nisaab.

4- Live stock.

5- On income derived from rental business.

CALCULATION OF ZAKAT:

1- To calculate Zakat on jewelry etc. one must first determine the gold or silver content and then calculate the Zakat according to current market price.

2- If the Gold possessed is less than 87.48 grams or if silver possessed is less then 612.36 grams, but the value of both combined is equal to or exceeds the Nisaab of either Gold or Silver, the Zakat will be due.

3- In the event of an article not being of pure gold or pure silver, but containing a mixture of other metals and the gold or silver content is more than the other metal, it will be regarded as gold or silver and Zakat will be due. But in the case where other metal/s is of greater quantity than either gold or silver, Zakat will not be due on this article.

4- For stocks (shares held in a company), Zakat is calculated based upon the current market value. As machinery, land, fixtures and fittings, furniture, buildings etc. are exempt from Zakat; one is allowed to subtract these from the total asset. This could be obtained from annual reports. For example, if one has shares worth $1000 and machinery, land etc., are worth 5% of the total asset, then deduct $50 for these assets; afterwards deduct the liabilities of the company proportionately to the percentage of shares held. Zakat must be calculated on the balance.

DISTRIBUTION OF ZAKAT:

1- Zakat should be given as soon as possible after it becomes due.

2- All of the Zakat can be given to one person or to several persons.

3- A poor man cannot be paid for his work from Zakat nor can Zakat be given in payment of services, except to the people appointed by the Islamic government to collect Zakat.

4- Zakat will only be valid if the recipient is made the owner of that amount. If, for example, a few needy persons are fed a meal from Zakat money, then Zakat will not be fulfilled as they were not made owners of the food.

5- Zakat cannot be given for the construction of Masjid, Madrasah, Hospital, a well, a bridge or any other public amenity.

6- Zakat can be paid in kind from the same merchandise on which it is due, or alternatively, it could be paid in cash.

TYPES OF WEALTH ON WHICH ZAKAT IS NOT IMPOSED:

1- On any metals other than gold or silver.

2- Fixtures and fittings of a shop, car, trucks or any delivery vehicle etc., which is used in running business.

3- Diamonds, pearls, other precious or semi precious stones which are for personal use.

4- There is no Zakat on personal residence, household furniture, pots and pan, personal clothing, whether they are in use or not.

5- There is no Zakat on a person whose liabilities exceeds or equals his assets. (Home Mortgage in this country is not to be counted as personal liability for the Zakat purpose).

RECIPIENTS OF ZAKAT:

The recipients of Zakat, according to Quran are as follows:

“Alms are for the poor and the needy, and those employed to administer (the funds); for those whose hearts have been (recently) reconciled (to truth); for those in bondage and in debt; and for the wayfarer: (Thus is it) ordained by Allah, and Allah is full of Knowledge and Wisdom.” (Quran 9:60)

1- FUQARA: people who are poor and who possess more than their basic needs but do not possess wealth equal to Nisaab.

2- MASAKEEN: people who are destitute and extremely needy to the extent they are forced to beg for their daily food rations.

3- AL-AMILEEN: people appointed by an Islamic Government to collect Zakat.

4- MU-ALLAFATUL-QULUB: persons who have recently accepted Islam and are in need of basic necessities who would benefit from encouragement by Muslims which would help strengthen their faith.

5- AR-RIQAAB: slaves who are permitted to work for remuneration and have an agreement from their masters to purchase their freedom on payment of fixed amounts.

6- AL-GHAARIMEEN: persons who have a debt and do not possess any other wealth or goods with which they could repay that which they owe. It is conditional that this debt was not created for any un-Islamic purpose.

7- FI-SABILILLAH: persons who have to carry out an obligatory deed which has become obligatory on them and subsequently (due to loss of wealth) are unable to complete that obligation.

8- IBN-US-SABEEL: persons who are travelers and during the course of their journey do not possess basic necessities, though they are well to do at home. They could be given Zakat in order to fulfill travel needs to return home.

PERSONS WHO CANNOT BE GIVEN ZAKAT:

1- Zakat cannot be given to the descendants of Muhammad (P.B.U.H);

2- Zakat cannot be given to parents and grandparents. In the same manner one’s children and grandchildren cannot be given Zakat. A husband and wife cannot give Zakat to each other.

3- Zakat contributions cannot be given to such institutions or organizations that do not give the rightful recipients possession of Zakat, but instead use Zakat funds for constructions, investment or salaries.

http://www.easyislam.com/zakat.asp

Thanks for being with me.

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