What is ‘Zakat’ or ‘Zakah’?

Zakat is the third basic duty of Islam. It is a kind of tax on Muslim’s money or possessions of wealth and it has to be paid every year to those who are less fortunate and in need.

The word ‘Zakah’ is an Arabic word and it means to ‘purify’. It purifies our soul, our attitudes and our feelings. It discourages us from being miserly, greedy and selfish. It purifies our wealth too. If Muslims do not pay Zakah to the poor and needy, their wealth and soul remains impure.

Zakah has been mentioned in 30 verses of the Quran. It was first revealed in Surah Al Muzzamil: 20. Allah says:

".... and establish regular prayers and give regular charity; and loan to Allah a beautiful loan. And whatever good ye send forth for your souls, ye shall find it in Allah's presence, Yea, better and greater in reward and seek ye the grace of Allah: for Allah is oft-forgiving, Most Merciful."

Rules for payment of Zakah

For payment of Zakah there are three conditions:

• Zakah is payable when a Muslim is in possession of wealth above the prescribed limit called “Nisab” that is 2.5 % of this possession.
• They must have possessed this money or the wealth above the prescribed limit for one whole year.
• The Zakah must be paid to those Muslims who are in need and deserve it, as laid down in the Quran and as explained by the Holy Prophet (PBUH).

The Rates of Zakah

Zakah needs only to be paid on those assets that exceed a prescribed limit or minimum value. This minimum value is calculated based on the market price of 85 grams of gold or 595 grams of pure silver. They must have owned them for one whole year and they must pay 2.5 % of the total possession.

Items on which Zakah is payable

• Business
• Rental Income
• Personal Income
• Savings
• Gold and Silver
• Shares
• Livestock
• Agriculture produce (Crop)
• Produce of Mines
• Cattle

Who are the Recipients of Zakat?

The Holy Quran classifies the due recipients of zakah under the following eight categories.

"Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to the truth); for those in bondage and in debt; in the cause of Allah; and for the wayfarer: (thus is it) ordained by Allah, and Allah is full of knowledge and wisdom." (Surah Taubah: 60)

• The poor (Faqir/Fuqara)

  those without any means of livelihood and material possessions.

• The needy (Masakeen)

  Those without sufficient means of livelihood to meet their basic necessities.

• The administrators of Zakah (Aamil)

  Those appointed to manage and administer zakah. This category is sub-divided into the following categories:

• The sympathisers (Muallaf)

  Those who are inclined to enter or have already converted to Islam.

• To free slaves (Riqab)

  Zakah can also be used to free slaves or captives.

• Those who are in debt (Gharimin)

  Zakah can be used to pay off the debts of a person who has borrowed to pay for basic necessities so that he/she can lead a normal life. Zakah can also be distributed to those in financial difficulties e.g. bankruptcy due to the loss of employment and heavy debt.

• For the cause of Allah (Fisabillillah)

  Zakah can be used to finance any form of struggle or work for the love of Allah. The following examples fall under this category, e.g. Da'wah; building & developing society's infrastructure; defending Muslims, who are being oppressed; assisting poor travelers and sponsoring a student's educational expenses.

• Those who are stranded during a journey (Ibnus Sabil)

  Zakah can also be used to help a traveler facing difficulties in continuing his journey due to reasons such as loss of money or the break down of his vehicles, the repair of which he cannot afford.