Determine your Zakat Due Date. This is required for valuation of your zakatable wealth. This date could be 1st of Ramzan, 1st of Muharram, 21st of Ramzan or any other convenient date as per lunar calendar. Once fixed, it has to remain same year after year. Please ascertain your zakat liability on the Zakat Due Date.
As a businessman, trader, merchant or industrialist, please undertake valuation of all your inventories – raw materials and finished goods on Zakat Due Date. The stock of raw materials must be valued at its landed cost price whereas stock of finished goods should be valued at market sales price.
If you have any sales receivables / bills receivables (for credit sales given to customers), you need to add it zakatable wealth.
Dead Stock and damaged stock should be valued at scrap value or its sale value. It should be added to zakatable wealth.
Deduct from the zakatable wealth the outstanding amount to your suppliers or trade creditors. Also deduct the loan taken on stock on Zakat Due Date.
There is no zakat on factory building, plant and machinery, equipment, furniture and fixtures used in the business. However, products products in the factory i.e. finished goods would form part of zakatable wealth.
Apart from business wealth, you may have personal zakatable wealth. Please ascertain exact quantity and value of your zakatable wealth. Take weighment of your gold and silver. Ascertain its purity level and ascertain its value as per market price prevalent on the Zakat Due Date.
Update all your accounts on the Zakat Due Date: Bank Balance, Post Office Deposits, Cooperative Credit Societies, Mutual Funds, Fixed Deposit, Recurring Deposit, Kisan Vikas Patrika, National Savings Certificates, Investment in Shares, Debentures, Government Securities, Bonds, , Investment in Bitcoins, Insurance Policies, Cash Balance in Hand, Gift Card balance, Wallet balance, Investment in New Pension Scheme, Caution Money or any other Refundable Deposit, Security Deposit or Advance with your landlord or friend or relatives, etc.
Please add the balances of all these financial instruments to your zakatable wealth of gold and silver.
If you have invested in plot of land (with the intention of resale) check up its market value and add it to your zakatable wealth.
Make sum total of all your zakatable wealth. Calculate your zakat liability to be 2.50% of your zakatable wealth.
There is no zakat on personal wealth – food, clothing, residence, car, scooter, motor cycle. Perquisites provided by the employer, like free housing, free or concessional food, free education or transport or hospital facilities, club facilities, holiday homes, etc., do not become part of zakatable wealth, hence they are not liable for zakat.
Ensure your zakat is not frittered by your individual disbursement but consolidated at an institutional level for disbursement in an organized way.
AMP Zakat Fund is one such institution with a network of dedicated team of young, qualified professionals located in different cities and towns in India, serves as a catalyst in the process of centralization of zakat collections and disbursements. It is rendering services with an intent to bring a positive change in the community.
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