We give below answers to FAQs. The answers are given to the best of our knowledge. However, Allah knows best.
1. Who is obliged to pay Zakat?
Zakat must be paid by every Muslim who has a nisab, which is the minimum of one's holdings liable to Zakat. The nisab is conditioned by the following:
2. What is Nisab?
Nisab is the minimum limit of wealth below which zakat is not payable by the owner of the wealth. However, it exceeds this minimum level, zakat is payable. The nisab limit is different for different class of wealth. For example, exemption limit on gold is 7 ½ tolas or 87.479 grams of pure gold, 52 ½ tolas of silver or 612.35 gms of silver, 5 camels, 40 goats, 30 cows and 653 kg of agricultural produce.
3. When Zakat be paid ?
Zakat must be paid for Gold and Silver Jewelry, Money, Merchandise Stock, Animal Stock after completion of one year of possession with the owner. In case of crops and some fruits it has to be paid on harvesting.
Zakat should be paid on the money left after meeting the expenses for such necessities as food, clothes, housing, vehicles and craft machines.
A complete year of Islamic calendar should pass, starting from the very day of the nisab's possession, without any decrease during the year. In case of its decrease (being less than nisab), the year count (hawl;) starts from the day of the nisab completion.
4. Can Zakat Payment be deferred?
Deferring payment of Zakat is prohibited, unless the giver for some valid reason cannot pay it on time. In such a case, he may wait until he is able to pay it.
5. How Zakat is computed on bank notes and bonds?
Since they are documents with guaranteed credits, banknotes and bonds are subject to Zakat once they attain the minimum of nisab.
6. How zakat is calculated on the income of a trader?
The trader should prepare a balance sheet showing the closing balance of stock and cash/bank balance and outstanding debtors. The outstanding debts should be deducted. On the remaining balance, Zakat should be paid 2.5 %. The stock should be valued at current prices.
7. What is Ushr?
Ushr is a kind of due (charity) levied on the produce of the lands. The farmers are required to pay 5% of the total produce of land which is irrigated and 10% of the total produce of land which is not irrigated. This due, again is for needy and indigent of the society.
8. I have bought some plots of land which are now lying vacant and unproductive. I wish to sell them at a profit at a later date. On one plot, I wish to construct a house and on another plot, I wish to build my shopping complex. Please let me know whether Zakat should be given on this unproductive land.
Plots of land with the intention of re-sale are items of trade or merchandise items. On the last date of lunar calendar, market value of these plots need to be ascertained and zakat paid thereon @ 2.50%.
However, zakat is not payable on that land which is meant for construction of dwelling house.
The other plot on which you intend to construct a shopping complex is a commercial commodity. On the day when your zakat falls due, you should estimate the value of the land and pay zakat.
9. Is it permissible to pay Zakat each month in advance?
There is nothing wrong in paying zakat in advance during the year. Zakat is a right of the poor people and in case you are paying in advance, it is a meritorious deed. It should start with Niyyat (intention) to make the payment. Sum total of these advance payment should be calculated and compared with the actual liability at the end of zakat period. Deficiency should be made good on the last date when zakat is due.
10. Should I pay zakat in money or can I pay in kind? Whether I should tell the receiver that it is zakat money?
You should give the zakat in the form of money because it is easier for the receiver to apply it for his needs as per his priority.
Zakat in kind (food, clothes, etc.) can also be given if the giver is a trader or manufacturer of those items. But it is still recommended to give money with proper advice to the receiver.
It is not necessary to tell the receiver that it is zakat money. You can simply give the money to that person without stating anything.
11. I have a land planted with rice crop; is Zakat applicable for crop or profit after calculating the expenses? The land is irrigated by rain besides irrigation by financial value; Zakat is 10% or 5%?
Zakat of on agricultural produce is due on its harvesting day. The minimum amount liable of Zakat is five awsuq that equals (653 kilograms). If the crop attains this amount, Zakat is valued according to irrigation method. The land is irrigated by rain and irrigation machine. If the large part is irrigated by rain, Zakat is 10 %. If the large part is irrigated by the owner's effort, Zakat is (5%) and Zakat is taken from this crop i.e. from the total amount of the crop. And .
12. Question: I have gold of 22 carats. Howe to convert it to gold of 24 carats and how can I calculate its Zakat?
Zakat is to be paid on the value of pure gold. First, weigh the possessed gold then multiply the result in gold carat and after that, divide the outcome by 24. The result will be multiplied to 2.5 %, and the result is gold Zakat. (Gold weigh X gold carat ÷ 24) = pure gold X gram price X 2.5 % = Zakat amount.
13. Is it permissible to keep some of the Zakat money to be paid to some people later?
The Zakat must be paid when it is due. If you keep some of it, you are committed before Allah to pay it. So it is better to pay it when it is due.
14. I have an amount of money that increases and decreases along one year, how can I calculate the Zakat?
You should define the date in which the money reaches the Nisab, then you start account for the year. After determining the beginning of the year, no matter the money increases or decreases, if one complete year passes and the money is stable at the Nisab amount, you must pay the Zakat which is 2.5% of the whole money whatever the decrease of increase.
15. I did not pay Zakat for last 5 years. I would like to know how can I pay my Zakat in this case?
You should ascertain the value of your wealth as per the market price at the end of each lunar year. Then you should account the total sum and pay 2.5% of the money.
16. I have an amount of money and I did not pay its Zakat for 6 months, should I pay the Zakat now or should I wait for another 6 months and pay for two-year Zakat?
You have to pay now for the money you have delayed for the last year.
17. My brother borrowed an amount of money from me. I did not ask for its repayment. He too did not return it. Should I pay Zakat upon this money?
No Zakat is due upon loans. If one complete year passes and then your brother pays it back at any time after this year, you have to pay the Zakat for one year only after getting the money.
18. I have inherited Rs. 10 lakh should I pay Zakat upon it?
Yes, after one year passes you have to pay @ 2.5%.
19. I had to pay my Zakat last Ramadan, but I did not. Now I am traveling to perform Hajj, is it permissible to postpone it till I come back from Hajj, or should I pay it now?
You have to pay the Zakat immediately and ask Allah to forgive you for the delay.
20. I bought a piece of land and I paid half of its price and I will pay the rest of its price after registration process. The money deposited in the bank passed one year in the bank. Should I pay the Zakat upon the whole money, or should I excluded the money allocated for the purchasing process?
You have to pay the Zakat upon the whole money.
21. I borrowed an amount of Rs. 5 lakh to buy a car and the scheme was to deduct a portion of my salary to pay the loan back. After 6 months of deducting I managed to pay back the loan as a whole at once. Should I pay Zakat upon this loan?
As you mentioned the loan did not complete one year with you. You used it in purchasing the car. No Zakat is payable.
22. I have a land that is leased out to another person. He cultivates it and pays me a lease rental. How can I pay my Zakat?
Zakat is paid on the rent only when this rent reaches the Nisab and one year passes, then 2.5% should be paid.
23. I have two houses dwelling in one of them and renting the other. I need to know how to pay Zakat on them.
No Zakat to be paid upon the house in which you dwell. However, zakat is payable on rental value @ 2.50%.
24. I buy and sell used cars? Is zakat payable on the transportation vehicles?
You have to pay a Zakat upon the car trading. In the end of each year, you have to evaluate the value of the cars and calculate its total money value and add to it the cash you have and pay a portion of 2.5% of the total value.
However, zakat is not payable on the car used for personal transportation.
25. I have purchased a plot of land valued Rs. 25 lakh , how much is its due Zakat?
Zakat depends upon the purpose for which land is acquired.
26. I need to know about the commercial trade Zakat.
After one complete year passes on your trade, you have to value the closing stock on the date when zakat is due. After calculating your total money, excluding debts, and other commitments, you have to pay 2.5% of the total money. The following equation can illustrate the Zakat:
Zakat amount = (the value of the goods + cash in the fund or bank + loans and advances receivable – loans and advances payable) x 2.5%
27. I trade in plots of land and real state, how can I calculate for the Zakat? Some of these properties passed one year with me.
After one complete year passes on your trade, you have to evaluate your goods in money terms. After calculating your total money, excluding debts, and other commitments, you have to pay 2.5% of the total money.
Zakat of Shares, Bonds and Properties:
28. I have stocks not for sale or trade; do they have Zakat?
Investment in shares held not for sale are long term investments for earning profits. Zakat is applicable on the dividends of the shares if they attain Nisab and a year has passed. If the shares are for trade and subject to market fluctuations, there is Zakat upon shares and profits if they attain Nisab and a year has passed.
29. I was trading in shares selling and buying, praise be to Allah as I gain from this trade six months ago; is there Zakat upon these shares?
Two conditions of Zakat upon money and possessions must be fulfilled. First, the possessions must attain Nisab. Second, a year should pass with this Nisab.
As for your case, if the shares attains Nisab in time of paying Zakat and a year has passed, then Zakat should be upon the assets of shares besides the profits. Zakat will be 2.5% of the total amount. If a year has not passed since the date of trade, then these shares have no Zakat.
30. I have shares in several companies, deposits in banks, real estates taken by installments from many ways. The total value of the real estates is triple the value of the shares; is there Zakat upon shares and deposits?
As for shares, they have two divisions:
First: Zakat is applied upon shares for trade according to market price by 2.5% if they attain Nisab and a year has passed.
Second: shares purchased for benefiting from profits only have two cases: first, assets of the shares are for commercial company, there is Zakat upon these shares like the first division for assets and profits. Second, if the assets of shares are fixed and not circulating like the shares of real estate and telecommunications companies, Zakat is applied to profits if they attain Nisab and a year has passed.
As for deposits and their profits, they have Zakat with 2.5% if they attain Nisab and a year has passed.
As for debt due to real estates that you have possessed, there is Zakat upon what you possess of money not used in settling debt, attains Nisab and a year has passed because debt does not hinder Zakat upon money.
As for real estates being in your possession, there is Zakat upon real estates if they are rented or for sale. Zakat is upon value of rent if it attains Nisab and a year has passed since the date of contract start to its end. If the value of rental is spent before completing the year or the remaining part does not attain Nisab, then it has no Zakat for not meeting the conditions of Zakat.
If the real estates are for sale as you bought them for trade, then Zakat is applied on their essence if they are still existent and a year has passed by evaluating them according to the market in time of paying Zakat. Zakat will be 2.5% of the total amount. If these real estates are personal possessions and not for sale or rent, they are not liable to Zakat.
31. I have shares in cooperative; I was informed that Zakat is applied on the market value of shares besides their profits because they are trade offers but shares of the cooperative are not pertaining to market as well as their value can not be calculated; how should I pay Zakat? By purchase value or what?
Determining market value is possible by offering shares for sale, the result is share's value besides profits, and you should pay 2.5% from the total amount of Zakat base and .
32. I started trade of shares with a capital of Rs. 1 lakh, after that, when I gain money, I buy new shares for speculation. Shall I calculate a new year for the news shares or all the shares are merged in one trade?
You should determine start of the year for the new shares because they are bought by an amount liable to Zakat and were not from the first shares. However, it is difficult for people to determine a year for each set, so the whole shares are set for a year, and then Zakat is paid from the total amount. Thus, the amount whose Zakat is applicable, is paid and as for the amount whose Zakat is not applicable, its Zakat is paid in advance. Paying Zakat in advance is allowed for the majority of scholars and .
33. Annual General Meetings of some companies are held recently where instead of distribution of profits of the last year, they have declared issuance of bonus shares. How can Zakat upon these bonus shares be calculated? Is Zakat calculated by market value for commercial company or service company intended for trade or should shares be treated as utilized shares?
The shares are treated as profits because they are result of trade in the previous shares and they should be divided cash but the assembly considered them as bonus shares that are more profitable than cash. Therefore, these shares are merged to the previous shares, profits are merged to its base and then Zakat is paid from the total amount.
Recipients of Zakat
34. I want to know the recipients of Zakat and is it allowed to pay Zakat for brothers and sisters?
Allah, the Most Exalted has specified recipients of Zakat in the following ayah: "Zakat expenditures are only for the poor and the needy, for those who collect them, for those whose hearts are to be reconciled, for the freedom of those who are captives and in debt, for the cause of Allah, and for the wayfarers; [it is] a duty imposed by Allah. Allah is the Knower, the Wise", [at-Tawbah 9: 60]. Therefore, recipients of Zakat are eight categories: the poor, the needy, those who collect Zakat, whose hearts are to be reconciled, freeing captives, person in debt, for the cause of Allah and wayfarer. If any category of the previous types applies to brothers and sisters, it is allowed to pay Zakat to them. In this case, you will have two rewards: reward of charity and reward of kinship and .
35. I have poor uncle whose salary is not sufficient for his family; is it permissible to pay Zakat to them?
Yes, it is allowed to pay Zakat to your uncle due to his poverty and you will have two rewards: reward of charity and reward of kinship and .
36. I want to pay Zakat to my stepbrother because he is going to get married as his salary is not sufficient; is it permissible?
Yes, it is allowed to pay Zakat to your stepbrother and you will have two rewards: reward of charity and reward of kinship and .
37. Is it allowed to specify a part of my money to be spent on my sister in education though my father pays money to her but he cannot fulfill her demands and I am n living with my sons in my private house?
It is allowed to pay Zakat to your relatives except parents and sons. In your case, it is permissible to pay Zakat to your sister and you will have two rewards: reward of charity and reward of kinship and .
38. I paid a large part of my money Zakat and there is still a small part to be given to certain people; is it allowed to delay Zakat? or should it be paid in time or before time?
You should pay Zakat in its specified time and it is not allowed to delay it as well as giving to its recipients. If there is an interest or you ward off evil, you might defer it, then it will be a debt to be paid soon, and .
39. Is it allowed to pay Zakat upon money to a poor family of four disable sons and deceased father?
It is permitted to give them your Zakat as long as they need this money. You also could give them all your Zakat upon money to fulfill their needs and .
40. Is it permitted to buy specific things by Zakat money to be given to a person who demands these things?
It is allowed to replace Zakat money with contributions in kind according to the needs of the poor.
41. Could I pay Zakat upon gold to my poor sister? Or it is obligatory to pay Zakat outside the one's relatives.
It is allowed to pay your Zakat upon gold to your sister as long as Zakat conditions are applicable to her. However, Zakat payer should pay his Zakat in his own place.
42. I have Zakat money and find that I have a relative of the first class who needs money for building a house for his family. In fact, he cannot afford the necessary requirements for building the house and the house will lodge his widow mother and little brothers.
If he is a relative from the first degree – father, mother, wife, sons, he does not deserve Zakat. Other than those mentioned like brother, sister or uncle deserves Zakat. If he is poor, it is allowed to give him Zakat because house is from the necessary demands of man and you will have two rewards: reward of charity and reward of kinship.
43. I have a dear friend who has debts, obligations and will get married; is it lawful to give him Zakat without informing him.
It is allowed to pay Zakat to person in debt if he has not sufficient money to pay his debt. It is preferable to give him Zakat without informing him.
44. I have relatives staying outside my native place and they have not the sufficient means of living; is it allowed to give them Zakat, knowing that they have a land that suffices them in case of selling it but the common traditions prevent them from selling the land.
Yes, it is allowed to give them Zakat. Possessing a land does not prevent them of receiving Zakat if they were poor. They are similar to those who own house to live in or cars to ride, as they are not obliged to sell them. They deserve Zakat if they are from the recipients of Zakat.
45. Is it permissible to collect Zakat to buy a small house for a family needing house?
It is allowed to buy a house from Zakat money if the family really needs a house.