Who should pay Zakat

Zakat is due on any Muslim adult, man or a woman, who owns minimum required amount of wealth. This eligibility is called Nisab.

What is Nisab?

It is equivalent of approximately 85 grams of pure gold or about 595 grams of pure silver. The Nisab of other kinds of investment, money and currency should be compared to the current market price of 85 grams of pure gold or 595 grams of pure silver.

For ease of understanding, the Nisab of cash on the day of the payment of Zakat is equivalent of the prevalent price of 85 grams of 999 quality pure gold. Any Muslim who had had a minimum of that much amount throughout the year is liable to pay Zakat.

When and how often to pay Zakat?

Zakat is due upon completion of one Hijri (lunar) year, starting from the day a person had acquired the status of Nisab. Alternatively, it will become due at the anniversary of his last Zakat payment.

If a person genuinely loses the status of Nisab before the anniversary, he is not liable to pay Zakat. However, if he subsequently regains Nisab, the countdown will start all over again from that date.

Who is eligible to receive Zakat?

Any Muslim who does not hold the status of Nisab is eligible to receive Zakat. However, preference in payment of Zakat should be given to the individuals from categories described above.

How Zakat should be distributed?

Every Muslim is directly responsible for discharging this obligation and must take care of it every year. It is his/her duty to reach out to the needy and poor and to offer them Zakat in a humble manner, without an iota of pride.

In certain Islamic countries, Zakat is collected by the government and distributed to the needy. In Gulf countries, this function is efficiently carried out by several well-trusted and high reputed NGOs.

Categories of wealth on which Zakat is due?

These are personal wealth, including cash beyond the normal day-to-day expenses, stocks of gold and silver, jewellery (gold and silver content only), shares and investments, profit from business, work in progress (WIP) and finished goods.

In agricultural produce, Ushur (agri-Zakat) is due on produce from cultivated land such as crops and non-cultivated land such as orchards.

In livestock, Zakat is levied on lamb, goats, cows and buffaloes (domestic, not wild) and camels. Animals raised as pet do not incur Zakat.

Zakat on personal jewellery of every day use?

Majority of scholars agree that jewelry, whether in everyday use or stored for occasions, must be included in calculating Zakat under ‘personal wealth’. However, jewellery-making charges should be excluded. As such it is preferable to get a break down of the gold content and making charges while buying new jewellery in order to arrive at correct calculation of Zakat.

Please note that precious stones (diamonds, ruby, pearls, etc.) are exempted from the payment of Zakat.

What about investment in shares?

Investment in shares are Zakat-able. The agreed procedure to calculate their value is to take the lower value at the beginning and end of the year and average them out.

Can relatives receive Zakat?

Yes, provided they are not dependents, such as wife, children, parents, grand parents and grand children.

As they say charity starts from home, in fact it is preferable to donate Zakat to poor relatives first. This is because the payer may be aware of their plight and hence the purpose of Zakat is well served. Interestingly, a wealthy wife can give Zakat to her poor husband but it is forbidden the other way around.

Can Zakat be paid in kind rather than cash?

Yes, Zakat can be paid in kind. It has been noted that some traders dispose of their obsolete inventory at current market prices in settlement of their Zakat.

This practice is unfair and does not absolve them from their due Zakat liability. Anyone paying Zakat in kind must do so with complete honesty.

Is there any etiquette for paying Zakat?

Zakat should be paid discreetly, with the intention of fulfilling a religious duty. There is a saying that if you pay Zakat with your right hand, the left hand should not come to know.

However, if somebody wants to publicise payment of Zakat with the sincere intention of influencing others in his circle, it is acceptable.

It may not be necessary to mention to the recipient that the payment is from Zakat, if it is feared that it would embarrass him/her.

Is there a fixed time of the year to pay Zakat?

No, Zakat can be paid at any time during the year. It could be paid in one lump sum or in installments, provided that the due amount is exhausted before the next.

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