zakat

Worship

quizDefine the term SALATDoes SALAT impact our personal and social lives as Muslims? Discuss.WorshipThe Basic Need of man2zakatA pillar of islamHistory of ZakatThe history of Zakat is the same as that of Salat. It is evident from the Holy Quran that like Salat its directive always existed in the Shariah of the previous Prophets.

When the Almighty asked the Muslims to pay it, it was not something unknown to them. All the followers of the religion of Ibrahim (AS) were fully aware of it. For this very reason Surah Al-Maarij (70:25) describes it as A specified right.History of ZakatZakat, a practice initiated by theIslamic prophetMuhammad two year after migration to Madina.

Thecaliph Hazrat Ab Bakr, Hazrat Muhammad's successor, was the first to institute a statutoryzakatsystem.

He established the principle that the zakat must be paid to the legitimate representative of the Prophet's authority.

zakatMeaning of ZakatLinguistically, ZAKAT has two meanings: PurificationGrowth

Technically, it means to purify one's possession of wealth by distributing a prescribed amount to the poor, the indigent, the slaves or captives, and the wayfarer.

Zakat Zakat is one of the five pillars of Islam.

It has been mentioned, along with daily Prayers (Salaat / Namaz), over seventy times in the Quran.

Allah's word commanding ".....and establish regular Salaat and GIVE regular Zakat....." are referred to in many parts of the Quran.

7Also in Hadith of Holy prophet () it is mentioned : { } .Narrated Ibn `Abbas:The Prophet () () sent Mu`adh to Yemen and said, "Invite the people to testify that none has the right to be worshipped but Allah and I am Allah's Messenger (),And if they obey you to do so, then teach them that Allah has enjoined on them five prayers in every day and night (in twenty-four hours),And if they obey you to do so, then teach them that Allah has made it obligatory for them to pay the Zakat from their property and it is to be taken from the wealthy among them and given to the poor."Zakat is obligatory upon a person if he/she is: NISAAB

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, there are two measures:Gold orSilverNisab of Zakat For Gold the nisaab is Gold 87.48 Gram 7.50 Tolas.

For silver the nisaab is Silver 612.36 Gram 52.50 Tolas.

Also in the Hadeeth it is said: The authority of Alkhudri, the prophet () said, There is no Zakat on less than five Awaq (silver) and there is no Zakat on less than five Awsuq (measure of grains).

Nisab of Zakat 1. Nisaab of cash, stock or bonds, other cash assets is the equivalent amount of Gold or Silver.

2. 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 previous slide, the Zakat is due at the rate of 2.5%.

Nisab of Zakat 3. 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 Zakah will be due.

4. The payment of Zakat is compulsory on the excess wealth or effects which is equal to or exceeds the value of Nisaab, and which is possessed for a full Islamic year.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.

DISTRIBUTION OF ZAKAT

Important tips1. 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. 4. Zakat will only be valid if the recipient is made the owner of that amount.

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.

Important tipsTYPES OF WEALTH ON WHICH ZAKAT IS NOT IMPOSED1. 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 exceed or equal his assets.

RECIPIENTS OF ZAKAT

Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler - an obligation [imposed] by Allah. And Allah is Knowing and Wise. [9:60]

1. FUQARA:People who are destitute and extremely needy to the extent they are forced to beg for their daily food rations.

2. MASAKEEN:They are the ones who can afford some of their needs, but not enough.They have their basic needs covered, but they are in need of money as it is not sufficient enough.

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

4. MU-ALLAFATUL-QULUB:Persons who have recently accepted Islam.

5. AR-RIQAAB:The fifth types are slaves and captives. The captives refer to slaves who had drawn up a written contract with their masters to purchase their freedom.

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.

7. FI-SABILILLAH:This means in the path of God and pertains to anyone struggling for a righteous cause, including expenditure towards the promotionof Islam and for all charitable purposes.

8. IBN-US-SABEEL:Persons who are travelers and during the course of their journey do not possess basic necessities.Non-recipients of Zakat1. Zakat cannot be given to parents, grandfather, etc. A husband and wife cannot give Zakat to each other.

2. Zakat cannot be used for the Kaf'n of a deceased person who has no heirs, because at that time he/she cannot become the owner.

3. If Zakat is given without inquiry and subsequently it is known that the recipient is wealthy the Zakat is not valid. It has to be given again.

4. Zakat cannot be given to non-Muslims.s VIRTUES OF ZAKAT

1. Gain the pleasure of Allah. 2. Increase in wealth and protection from losses. 3. Allah's forgiveness and blessings. 4. Protection from the wrath of Allah and from a bad death. 5. A shelter on the Day of Judgment.6. Security from seventy misfortunes.

It is stated in the Hadith that by giving Zakat the following benefits are derived:THE PUNISHMENT FOR NOT GIVING ZAKAT

O you who have believed, indeed many of the scholars and the monks devour the wealth of people unjustly and avert [them] from the way of Allah. And those who hoard gold and silver and spend it not in the way of Allah - give them tidings of a painful punishment. [9:34]

The Day when it will be heated in the fire of Hell and seared therewith will be their foreheads, their flanks, and their backs, [it will be said], "This is what you hoarded for yourselves, so taste what you used to hoard.[Tawba,9:35]

Benefits of Zakat

1. Zakat, reminder that what we have is of Allah!

2. Zakat functions as a social security for all!

3. Zakat , an act of worship!

4. Economically, the best check against hoarding!

CalculationsZakat Calculator(Use Only YELLOW cells to fill Values. Please refer to the Appendix Sheet for more explanations on Each Section)Weight in GMSPrice/GmEstimated ValueZakat Payable1ZAKAT ON GOLD24 Carat Gold/Jewelry.000.022 Carat Gold/Jewelery.000.018 Carat Gold/Jewelry.000.0Other Gold Valuables. (Pls insert the Current Estimated Value)0.02ZAKAT ON PRECIOUS STONESCalculate the nett Market Value of the Precious stones like Diamonds, Rubies, Etc. and add them to the Estimated Value Column0.03ZAKAT ON SILVERInclude Household Silver Utensils, Artefacts, and Jewelery. For Utensils, usually the silver is 90% pure so take 90% of the total weight.000.04ZAKAT ON CASH IN HAND /BANKActual ValueCash in Hand0.0Cash in Bank in Savings Accounts0.0Cash in Bank in Current Accounts0.0Cash held in Fixed Deposits0.05ZAKAT ON LOANS / INVESTMENTS/ FUNDS/ SHARES, ETCActual ValueLoans Receivable from Friends and Relatives0.0Investment in Govt Bonds0.0Provident Fund Contribution to date.0.0Insurance Premiums including bonus up to date0.0Value of Shares (stocks) including Dividends. Take their market value on the date of calculation0.0Government Security Deposits, ADRs, etc0.0Investment in Private Chits, Funds, etc0.0Other Sources of Wealth0.06ZAKAT ON LANDED PROPERTYEstimate ValueLanded Property held as an Investment / Business (Estimate the current Maket Value)0.07ZAKAT ON BUSINESSValue of Saleable StockValue of Damaged / Dead StockAmount Receivable from Credit SalesLESS: Amount Payable to Suppliers (Credit taken from suppliers for stocking goods)LESS: Bad DebtsTOTAL VALUE OF STOCK.000.08ZAKAT ON SHARE IN PARTNERSHIP FIRMSCapital Balance as per Last balance SheetLoans Advanced by you to the Firm as of DateLESS: Withdrawals made by you during the current Year.Accumulated Profit from the date of Balance Sheet to this Date (Estimate the Profit Value as it is difficult to get exact figures in the middle of Accounting Year)NETT TOTAL WORTH CALCULATED.000.09ZAKAT ON AGRICULTURAL PRODUCEValue of ProduceProduce Dependent on Rain Water - @ 10% of product (crop) in Value or Kind0.0Produce totally dependent on Artificial Irrigation like Canal, Tank, Borewell, etc. - @ 5% of Produce (crop) in Value or in Kind0.0Produce dependent Partially on Rain Water and Partially on Artificial Irrigation - 7.5% of the Produce Value or in Kind0.010ZAKAT ON ANIMALS & POULTRY & FISH FARMINGTotal ValueAnimals/ Birds more than 6 months Old - @ 1 Animal or Bird PER 40 either in Kind or Value of the same.0.011GENERAL LIABILITIES - You need to deduct your direct Payables or Liabilities which are not deducted aboveLoans taken from from Friends / RelativesLoans Taken from Banks / InstitutionsIncome Tax / Wealth Tax PayableTOTAL LIABILITIES.00.00TOTAL ZAKAT PAYABLE.00

&C&"Arial,Bold"&11Zakat Calculation Spreadsheet&R&DPage &P of &NYou will need to find out the market price as of today and insert the same in Price/GmThese are just notional Values, please check current market price and insert it hereThese are just notional Values, please check current market price and insert it hereThese are just notional Values, please check current market price and insert it herePlease find out the value of Silver per Gm and insert it in Price/Gm ColumnThese are just notional Values, please check current market price and insert it hereList out your entire sources of wealth. Even money receivable given as a loan to someone is to be calculated for zakat purposesIf your company as a whole pays zakat then you need not calculate personal zakat. If not then you have to see your personal share in the firm and pay zakat on that percentage.The calculation Fish Farming and Poultry Birds is a little bit complicated. Pls contact your Local Aalim for the right calculations.

Summary and InstructionsDear Brothers & Sisters,Alhamdulillah, the month of Ramadhan has been bestowed upon us by Allah. ZAKAT is one of the five fundamental pillars of Islam, mandatory on all muslims who are of eligible wealth. Zakat is due from and payable by a person on his wealth (and not his income), which has remained with him/her for one Islamic year.It is difficult to calculate the completion of one year on each item of wealth, because purchase dates may vary. To overcome this difficulty, a practical method is to fix a date (e.g. 1st of Ramadhan), compute your total wealth on that date and calculate Zakat, thereon.The attached spreadsheet is a humble attempt at making the calculation process simple and consolidated, for all brothers and sisters who are fortunate to be worthy of paying Zakat. If there are any errors, its purely due to my incomprehension and may be brought to my notice immdtly by email at [email protected]. Please remember me in your supplications and may Allah give us all the rewards of both worlds. Aameen.Yours Brother in Islam, Arif Jameel.Details of Each Section to be used in conjunction with the Calculation Spreadsheet.1Zakat on Pure Gold and Gold JewelleryZakat should be calculated at 2.5% of the market value as on the date of valuation (In our case we consider 1st of Ramadhan). Most Ulema favour the Market Value prevailing as on the date of Calculation and not the purchase price.A Reduction of 2% from the weight of Jewellery can be allowed towards studded stones jewellery & 25% from the weight of KUNDAN Jewellery.2Zakat on Precious and Semi-Precious StonesThere is some contention on whether these are to be considered for valuation. In my humble opinion if they have a value, then they calculate towards your wealth, and it is on the wealth that Zakat is mandatory.One may calculate the saleable value of Items at hand on the date of Zakat Calculation.3Zakat on Silver.Zakat is to be paid on Silver in Pure form or Jewellery, Utensils, Decorative items and all household items including crockery, cutlery made of silver at 2.5% of the prevailing market rates.4Zakat on Cash and Bank BalancesZakat should be paid at 2.5% on all cash balance and bank balances in your savings, current or FD accounts. The amount technically should be in the bank for one year. Usually it happens that the balance keeps on changing as per personal requirements.You may make your best judgement and the best way is to pay on remaining amount on the day of calculation5Zakat on Loans Given, Funds, etcZakat is payable by you on loans you have given to your friends and relatives. It should be treated as Cash in Hand. You may deduct Loans Payable by you to arrive at the nett present value of your wealth.Zakat is payable on all Govt Bonds, Public Sector Bond, paid-up Insurance premiums, your paid-up portion of Provident Funds, Govt Bills receivables, etc.6Zakat on Landed PropertyZakat is not payable on personal residential House even if you have more than one and meant for residential purpose only. Also Zakat is not applicable on Property given on rent irrespective of how many. However Zakat is payable on the rental income.However if your intention of holding properties is to sell at a future date for a profit or as an investment, then Zakat is payable on the Market Value. Also, if your intention of holding properties changes in the current year, I.e. from self use to business then you need to pay Zakat on that Property Value7Zakat on Business:This is for Business Persons only. No matter what business you are into, you've got to pay Zakat on all STOCK-IN-TRADE. The stock must be valued at its Landed Cost Price. If you have any bills receivable (sales given on credit) then you need to add the same towards calculations.Deduct the Amounts due to your suppliers and deduct the loans on stock on the date of calculation. Dead Stock should be calculated on scrap value or its saleable value. Damaged stock should also be valued at its scrap value.Be honest in the calculations, as ZAKAT is an INSURANCE on your STOCK directly from ALLAH and who better an insurer than Him.There is no Zakat on Factory Buildings or any kind of machinery, but there is zakat on products produced in the factory (i.e. finished goods value). Please refer to a competent Moulvi or a scholar who can shed more light on your specific issues.8Zakat on Partnership Firms.Zakat can be paid EITHER by the firm OR separately by the owners. If the firm is not paying, and the partner wants to calculate his share, he should take the amount standing to his capital and loan account as per the last balance sheet. Add his estimated share of profit till the date zakat is calculated.This can only be estimated as it is difficult to calculate the exact profit or loss between an accounting year.9Zakat on Agricultural ProductZakat is payable on all Agricultural produce including fruits, commercially grown flowers, vegetables and all types of grains at the harvest time itself. The passing of One year does not apply for agrultural produce. If there are two or more crops on the same land per year, then Zakat has to be paid as many times on the crop, irrespective of the time.The formula for Zakat calculation on Agriculture is as follows:On crops dependent purely on rain water it will be 10% of produce, On crops not irrigated through rain water but use Canal Water, Tank Water, Borewell and Open wells, the Zakat is 5% of the produce. For Crops dependent partly on Rain Water and partly on other water, the Zakat applicable would be 7.5% of produce.10Zakat on AnimalsOn all grazing animals like goats, shee, camel, cows, broiler chickens, the consensus Zakat payable is one animal/bird for every 40 animals owned. However you may wish to give cash in lieu of the animal/bird itself.Please consult your local Scholar or Maulvi or Imaam who can guide you to the right direction, or refer to books of Fiqh if you would like to have first hand confirmation of the situation.11Liabilities DeductionsIf you have any pending tax payable to the govt, as of the date of Zakat Calculation, then the same may be deducted before arriving at the net worth. If you have taken any loans from any person or institution, and if you have not already deducted the same from any of the above sections, then you can deduct your Payables over here. Please be truthful, as Zakat is a sure way of protecting ones wealth if Zakat has been paid on it regularly and fully.FOOTNOTE: Please note that Interest in any form is Haram and strictly prohibited. So please stay away from taking Loans on Interests AND Collection of Interests from any body or institution.

&L&"Arial,Italic"&8Appendix: Explanations To be used in conjunction with the Spreadsheet on Zakat Calculator&RPage &P of &N

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