بسم اللّٰه الرحمن الحيم
A Muslim should pay Zakah as 2.5% of his total wealth that he owns on the Zakah-date. If he owns ₹1 lakh, he should pay ₹2500.
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Also refer the Chapter of Zakah in Simple Fiqh.
To find the total wealth, the following should be summed up:
1. The market price of every gold and silver item that he owns,
2. All the money that he owns: in hand, in bank, and money given to somebody as loan.
3. The market price of his entire stock of merchandise for sale.
4. For a factory-owner, the price of all completed products, that of the products in various stages of completion, and the price of the raw materials should be added up. The prices of machinery, land, etc. should be ignored. (Ap Zakat kis tarah ada kareñ by Mufti Taqi Usmani:34)
The above market prices should be calculated as on the day of paying Zakah (JFM 1/149), or as on the day of calculating Zakah (Ap Zakat kis tarah ada kareñ: 29).
It is preferable to base the calculation on the wholesale market rate. (Ap Zakat kis tarah ada kareñ by Mufti Taqi Usmani: 29)
The following should then be deducted:
1. Loan that he has taken from somebody and which he has to return all-at-once.
2. For long-term loan in which he only needs to pay a specified sum each year, he should deduct only that year’s loan installment.
This is his total wealth.
• When a person becomes the owner of Nisab (Zakah-worthy wealth), he should wait for a lunar year. If he still holds more than the Nisab, this is the end of his first Zakah-year. And this is his annual Zakah-date when Zakah becomes obligatory (Farz) for him.
• If a person finds difficulty in estimating his exact Zakah-date, he may fix any day of the Hijri year ((e.g. a day in Ramazan) as his Zakah-day. And every year, he should pay Zakah based on his wealth on this day. (Ap Zakat kis tarah ada kareñ: 44)
• Once fixed, the Zakah-day must be adhered to. It cannot be changed later on arbitrarily.
• It is the market price of 87.48 gram of silver. It amounts to ₹ 27,180 for Hyderabad on 12 Jun 2016. (Sources: Jadeed Fiqhi Masail by Maulana Khalid Saifullah Rahmani 1/137; indiagoldrate.com).
• A person owning this amount is considered rich by the Shari’ah. He should pay Sadaqatul Fitr, make Idul Azha sacrifice and cannot accept Zakah-amount.
• For Zakah to be obligatory upon him, there is an additional condition that even after passage of a year, he should remain owner of Nisab.
• poor people who own less than the Nisab amount
• Zakah-collector appointed by Khalifah or his representative
• a person in debt who does not have enough money to pay it off: If he has taken the debt for something sinful like television, lavish marriage, impermissible rituals of death, etc. he should not be helped with Zakah-money. (Ma’ariful Quran English 4/413)
• a mujahid who does not have the means to buy weapons and war supplies
• a person on whom Haj is Farz (because he owned enough money on some past occasion) but he does not have enough money now to carry out that Farz
• a traveler who does not have enough money with him during journey to reach his destination comfortably, though he owns Nisab amount at his home
• Zakah-payment is valid only if the ultimate recipient is made complete owner of the money.
• It is essential that the Zakah-payer makes the intention of Zakah when paying it to the ultimate recipient (e.g. a poor person) or to an agent (e.g. a madrasah representative).
• It is not necessary to tell the poor person that this is Zakah-money.
• If a poor person is given Zakah-money in return for some service rendered by him, Zakah remains unpaid. (Ma’ariful Quran English 4/403)
• When paying to a madrasah-representative, he must be informed that it is Zakah-money.
• Zakah cannot be paid to the tax-collector for the government of our Kafir countries.
• Zakah cannot be paid for construction of masjids, bridges, madrasah buildings etc.
• Zakah cannot be paid to a Kafir: people who do not call themselves Muslims, people who call themselves Ahmadis/Qadiyanis, Shias, Westernists (communists, seculars, liberals, etc.) who believe that Islam should be confined only to masjids and homes, people who believe that Islamic laws are no more applicable because times have changed, people who show contempt towards ‘Ulama claiming that they want to take the Ummah 15 centuries behind.
All of the above are Kafirs. No amount of Salah and Haj will take them to Jannah unless they revert to Islam – as understood and practiced by the reliable ‘Ulama – before death.
• Zakah should also not be paid to a rich person (Nisab-owner), to one’s parents and grandparents, to his offspring and offspring’s offspring, and to his spouse.
• There is no Zakah on diamond and gems. (Jadid Fiqhi Masail 1/141)
• For people who have purchased shares with the intention of retaining it and benefitting only from the profit/dividend paid by the company on that share, they shall consider the actual company-acknowledged price (face value) of the share for total wealth calculation.
• For people who have purchased shares with the intention of selling it back when its market price rises, they should consider the market value of the share for total wealth calculation. (Jadid Fiqhi Masail 1/144)
• The market value of shares is usually higher than the face value for profit-making companies.
• If a person purchases a land and at the time of purchase he had the intention that he would sell it later when its price rises, then the price of this land should be included in his total wealth for Zakah-payment.
• If he had no clear intention while purchasing (I will think later what to do with this land: build a house for myself, put it on rent, or sell it), then this land will not be included in his total wealth.
• The land will also not be included in his total wealth when at the time of purchase itself, his intention was to rent it or keep it for personal use. (Ap Zakat kis tarah ada kareñ: 30)
• For the first case, the market price on the day of Zakah-calculation should be considered. (Ap Zakat kis tarah ada kareñ: 29)
Zakah to TV-owner
(Source: Ap Zakat kis tarah ada kareñ: 63)
Question: A person apparently has all the commodities of comfortable life in his house like television, VCR, etc. Yet he is needy on account of expenses for medical treatment, children’s education, marriage, etc. Can we pay Zakah to him?
If he is really needy, he should first sell off his TV, VCR, etc. If he still remains needy (owning less than Nisab-money), Zakah may be paid to him. Before he sells off these unnecessary objects of sin, paying Zakah to him will not be permissible.
Zakah on Debt that you have given to a needy
• When there is little or no hope of getting back the money (the debtor is denying having taken the loan, the debtor has gone bankrupt, or the debtor has gone missing), if the creditor gets back the money later on, there is no need to pay Zakah of previous years on this amount.
• As long as he does not get back the money, obviously, he should not include it in his total wealth for Zakah.
• If a debtor acknowledges the debt, but keeps delaying payment for an entire year (the period between creditor’s Zakah-dates) even though the creditor has asked for his money, then the creditor need not include this loan in his total wealth for Zakah of that year.
(Jadid Fiqhi Masail: 2/35)
Zakah on loan that you have taken
• If you are supposed to pay the loan all at once, you should deduct the entire loan amount from your total wealth for Zakah.
• If it is a long-term loan where you are paying back in instalments, you should deduct only that year’s instalment from your total wealth.
• If Haj, Sadaqatul Fitr, Idul Azha sacrifice, Vow-money, Expiation for breaking fasting, etc. are due upon a person, those amounts shall not be deducted from his total wealth. This is the ruling for all loans and dues that one owes to Allah. (Jadid Fiqhi Masail 2/40)
• The unpaid Mahr amount shall also not be deducted from husband’s total wealth. (Jadid Fiqhi Masail 1/150)