Zakat

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"True piety is this: to believe in God, and the Last Day, the Angels, the Book, and the Prophets, to give of one’s substance, however cherished, to kinsmen, and orphans, the needy, the traveler, beggars, and to ransom the slave, to perform the prayer, to pay the zakat.” (Qur’an 2:177)

The Meaning and Purpose of Zakat

The literal meaning of Zakat is ‘to cleanse’ or ‘purification’. In the Islamic faith, Zakat means purifying your wealth for the will of Allah SWT; to acknowledge that everything we own belongs to Allah SWT and to work towards the betterment of the Muslim Ummah. According to Islamic regulations, Zakat is 2.5% of one year’s total cumulative wealth. This amount is then distributed to the poor. Prophet Mohammad (PBUH) has said “Whoever pays the zakat on his wealth will have its evil removed from him” (Ibn Khuzaimah and at-Tabaraani).

Zakat as a Means of Spiritual Purification

Zakat is not only a means to purify one’s wealth but it is also a spiritual purification which serves as a means to draw an individual closer to the Creator, Allah SWT. Ibn Taimiah said that, “the soul of one who gives zakat is blessed and so is his wealth”. It is quite clear from the above narration that in addition to being a moral obligation, Zakat is also a spiritual one which is why millions of Muslims every year give Zakat to the poor.

'In their wealth there is a known share for the beggars and the destitute’ (70:24-25)

We mentioned how Zakat is a means of connection between the person and Allah SWT. It also provides a connection between the giver and the recipient. The entire concept of donating a fraction of one’s wealth to the poor is a highly honourable act; one that comes with valuable lessons as well as blessings. First and foremost, it teaches Muslims self-discipline, allowing the giver to free themselves from the love of possessions and greed.

Who Should Pay Zakat?

Zakat is one of the five pillars of Islam. As such, it is compulsory on Muslims, provided they meet certain conditions and criteria. Any Muslim who possesses the required nisaab (the minimum amount of wealth that one must have before zakat is payable) for one whole year is bound to pay Zakat on that wealth. It is imperative that Muslims know exactly how much Zakat they owe and how to calculate Zakat so that the right amount can be given to the intended recipient.

A lot of people choose Ramadan as the month in which they pay their zakat and for good reasons. Ramadan is the month of blessings and the rewards for all good deeds is far greater in this blessed Ramadan that in any other month.

The Beneficiaries of Zakat?

 To put it in simple terms, people who are poor and suffering are eligible to receive Zakat money. They can be any of the following:

• The Poor & The Needy – these people may have some wealth and funds but it is not enough to make up for the nisaab.
• The Destitute – People who have no wealth or funds. They are living their life on the very basics necessities of life.
• Zakat Collectors – People who collect Zakat as well as distribute it.
• Muslim Converts – This category was specifically designed to get new Muslim converts who were genuinely poor on their feet. It still exists to this day.
• People in Debt – People who are in debt but cannot pay it back are eligible for Zakat.
• Travellers – Muslims who are in the middle of their journey and out of money are eligible for zakat donations.

Zakat Cannot Be Used For

• building mosques
• to bury the deceased  
• to clear the debt of the deceased

Making the Intention of Zakat

 Making an intention is integral in Islam. It can be found in virtually every discipline in the Islamic faith. Muslims make an intention to pray before they pray. The same goes for fasting and Hajj. It is therefore, mandatory to make intention of giving zakat, either at the time of organising the payment or at the time of payment.

Items That Fall Under the Scope of Zakat

 Jewellery and Precious Metal – Case in point, Gold and Silver. Both are come under Zakat even if they are used merely for decorative purposes. The reason behind it is simple; they contribute towards your cumulative wealth and as such their worth must be tabulated when calculating Zakat.

• Bank Accounts – Any cash, bonds, stock one might have in their savings account. The amount should be in the bank for one year. Loans given or funds received are also part of the Zakat process.
• Cattle and Crops - Cattle and crops that are in excess of one’s need.

 ‘TAKE ALMS FROM THEIR PROPERTY THAT YOU MAY PURIFY AND SANCTIFY THEM AND PRAY FOR THEM. VERILY YOUR PRAYERS ARE A COMFORT FOR THEM’ (9:103)

 General Conditions of Zakat

 Making Niyat is only half the task. Muslims must also consider the following conditions in order to ensure their Zakat contribution is paid correctly.

 Recipient’s Eligibility: It is absolutely imperative that every shred of aid given reaches only those who need it most. As such, recipients of Zakat must be sufficiently poor to receive it. In a nutshell, if they don’t have personal assets that either meet or exceed the nisab, they are eligible to receive Zakat.

• Paying Zakat In Advance: People who wish to pay for Zakat for future years can certainly do so. Keep in mind that the pre-paid amount can be offset against the actual zakat liability incurred in future years.
• Payment in Kind: Zakat can be paid in many ways. The ideal way for today’s fast paced world is cash or if some people prefer, they can pay in kind as long as the value of goods are equal to the cash amount and furthermore, the recipient has agreed to accept the goods in kind. 

Zakat and Tax:

Some people might think Zakat is a form of tax. It is not. Zakat and tax are two entirely different things. One is a spiritual act and an obligation as a caring human being and the other is a requirement of secular law. The concept of Zakat is to assist the poor and those who are suffering in order to help them end their suffering and get back on their feet.