What is Zakat?
Zakat, also known as almsgiving, holds a significant place among the fundamental pillars of Islam, alongside prayer (salah), fasting (sawm), pilgrimage (Hajj), and belief in Allah and His Messenger, Prophet Muhammad (peace be upon him) (shahadah). It is a compulsory act for Muslims to fulfill their religious duties.
For financially capable and mentally sound adult Muslims who possess wealth exceeding a specific threshold called the Nisab, it is incumbent upon them to give 2.5% of their wealth as Zakat.
The Qur’an emphasizes the importance of giving to those in need: “And those in whose wealth there is a recognized right, for the needy and deprived” (Qur’an 70:24-5).
Zakat is to be paid annually, with the obligation arising once a lunar (Islamic) year has passed since one’s wealth meets or surpasses the Nisab. The collected Zakat is then carefully distributed to eligible recipients, ensuring that the most vulnerable, including children and those impacted by war, disease, and climate disasters, receive the necessary assistance.
At Bonayn , we take great care in distributing your Zakat to provide help and support to those who are truly in need, aiming to uplift the disadvantaged and provide them with opportunities for a better life.
What is Nisab?
Nisab, in the context of Islamic finance, represents the minimum amount of wealth an individual must possess before they are obligated to pay Zakat, a form of charitable giving. Often referred to as the Nisab threshold, it is determined by the values of gold and silver.
As of 22nd March 2023, the Nisab value is equivalent to
- approximately $442.06 when calculated using 612.36 grams of silver,
- approximately $5,443.84 when calculated using 87.48 grams of gold.
This means that if a Muslim’s wealth exceeds either of these amounts, they are required to pay Zakat, which is an essential practice in Islamic financial and spiritual matters.
how to calculate zakat ?
Zakat on Gold
In Islam, Zakat is an important act of giving and charity, and it also applies to gold that meets certain criteria. The following are key points regarding Zakat on gold:
- Nisab Threshold: Just like with other forms of wealth, Zakat on gold is applicable when the value of gold owned by an individual reaches or exceeds the Nisab threshold. The Nisab value is determined based on the current market value of gold and is equivalent to a specific weight in grams.
- Zakat Calculation: Once an individual’s gold holdings reach the Nisab threshold, they are required to pay 2.5% of the total value of their gold as Zakat. This amount is calculated based on the current market value of the gold at the time of payment.
- Types of Gold: Zakat is applicable not only to gold jewelry but also to other forms of gold, such as gold coins and bars, as long as they are intended for personal use or investment.
- Intention: For Zakat on gold to be obligatory, the individual must have the intention (niyyah) to keep the gold as a form of wealth and not for personal adornment, such as wedding jewelry or regularly worn accessories.
- Due Date: Zakat on gold becomes due after a lunar (Islamic) year has passed since the gold holdings reached the Nisab threshold. It is advisable to calculate Zakat on gold annually at the same time each year.
- Purification and Blessings: Paying Zakat on gold purifies one’s wealth and blessings and brings numerous rewards and benefits in this life and the hereafter.
Remember, Zakat is a religious duty and a means of helping those in need within the community. If you are eligible to pay Zakat on your gold, consider giving it to deserving individuals or charitable organizations to make a positive impact on the lives of others and earn the blessings of Allah (SWT). Always consult with a knowledgeable Islamic scholar or authority to ensure you fulfill your Zakat obligations accurately and in accordance with Islamic teachings.
Zakat on Money
In Islam, Zakat is an obligatory act of charity and giving that applies to various forms of wealth, including money. Here are key points regarding Zakat on money:
- Nisab Threshold: Zakat on money becomes obligatory when the total wealth of an individual, including cash, savings, and other monetary assets, reaches or exceeds the Nisab threshold. The Nisab value is determined based on the current market value of gold or silver and is equivalent to a specific amount of wealth.
- Zakat Calculation: Once an individual’s total wealth surpasses the Nisab threshold, they are required to pay 2.5% of their total wealth as Zakat. This amount is calculated based on the cumulative value of all monetary assets owned, including cash, bank balances, investments, and other financial holdings.
- Intention: To be eligible for Zakat, the individual must have the intention (niyyah) to keep the money as wealth and not for immediate or regular consumption, such as money set aside for basic expenses or personal needs.
- Due Date: Zakat on money becomes due after a lunar (Islamic) year has passed since the wealth exceeded the Nisab threshold. It is recommended to calculate and pay Zakat annually, ideally at the same time each year.
- Eligibility: Not all money is subject to Zakat. For instance, money set aside for immediate use, basic necessities, or outstanding debts does not count towards Zakat. However, wealth intended for savings and investments are subject to Zakat.
- Purpose: The purpose of Zakat is to purify one’s wealth and help those in need within the community. It is a means of social justice and solidarity, ensuring that wealth is distributed more equitably.
- Benefits: Paying Zakat on money brings numerous spiritual rewards and blessings, and it serves as a means of seeking Allah’s (SWT) pleasure and mercy.
It’s important to calculate and pay Zakat accurately and on time, following the guidelines and teachings of Islam. If you have questions about Zakat on money or any other aspect of Islamic practices, consult with a knowledgeable Islamic scholar or authority for guidance.
Feel free to contact us anytime you need any help or in case if you have any questions, don’t hesitate to get in touch with us