Linguistically, Zakat has two meanings:
The first literal meaning of Zakat is purity which is deduced from the saying of Allah ﷻ: “Take, [O, Muhammad], from their wealth a charity by which you purify them and cause them increase…” [Qur’an 9:103]
The second meaning is extra and growth, such as when a person says the plants have grown intending the meaning that they have increased.
Zakat according to the Sacred Law is the ownership of a certain amount of wealth that has been prescribed by the law for a poor Muslim.
Zakat is obligatory on a person who fulfils the following conditions:
1. One must be a Muslim. The reason Islam is conditional is because Zakat is an act of worship and such worship cannot be brought about by an unbeliever.
2. The person must be free, not a slave. The reason freedom is stipulated is because perfect ownership can only arise through the absence of slavery.
3. Maturity is conditional for the reason that it is not obligatory upon a child.
4. Sanity is conditional for the reason that zakat is not necessary on the wealth possessed by children who have not yet gained intellect.
5. One must be in possession of a Nisab minimum amount (will be discussed further) from things of a productive nature of which a profit is derived, such as grazing cattle, crops, gold, silver or merchandise for business. The Nisab is a sum of wealth large enough to require the owner to pay zakat on it. In addition, there is no Zakat on effects that are not of a productive nature, even if these things are in excess of one’s needs, such as cars, utensils, food, clothing, shelter, or furniture etc., if such items are not for trade.
6. One must have complete ownership of the minimum Nisab value for a full lunar year (12 month cycle)
Zakat is 2.5% of the total wealth – for instance, if one has £1000 of wealth liable for Zakat, you would pay £25.
The condition that obligates one to pay Zakat is the possession of the original Nisab minimum amount for a complete year. Therefore, one must own the minimum amount and a year must pass over such ownership. Accordingly, the obligation immediately arises on the passage of a year.
In order for the act of offering the Zakat to be valid, the one paying the Zakat is required to intend for payment of Zakat (i.e., intention is integral) and he may do this when paying the Zakat to the poor or at the time when he is separating the required amount from the rest of his wealth. To offer Zakat without an intention coinciding with the payment or with the setting-aside of the obligatory portion is not valid. In addition, it is not a stipulation for the poor person receiving the Zakat to know that he is receiving Zakat.
Zakat is compulsory upon gold and silver whether that is in the form of assets, jewellery or cash. The value of these is to be equal to the amount discussed ahead. Second is livestock and they are camels, cows and sheep which is agreed upon in the Madhab. According to Imam Abu Hanifa, Zakat is to be paid upon horses. Livestock refers to cattle that graze on pastures. Further, merchandise of trade also requires one to pay Zakat once it equates to the value of the Nisab.
The Nisab is that portion of wealth (minimum amount) a person possesses which makes him eligible to pay Zakat. If a person possesses this Nisab (minimum amount) for a complete lunar year, the poor now have a right upon this portion and the owner is obliged to pay Zakat.
Zakat is not due on gold until the owner possesses twenty Mithqāl which is approximately 93 grams. 1 gram of gold is approximately £26 thus the Nisab equates to £2422.
With respect to silver, there is no Zakat due on it until the owner possesses 200 dirhams of silver which is equivalent to approximate weight being 630 grams. 1 gram of silver is approximately worth 42 pence thus the Nisab equates to £264.60.
The Nisab of your monies is calculated utilising the Nisab of silver thus if you have approximately £264 of cash for a whole year, then zakat will be fardh upon you.
A long-term mortgage is to be deducted when making the Zakat calculation, for instance, if one is paying £900 on a monthly basis thus when zakat becomes obligatory, he should subtract that month’s payment out of the savings and then pay 2.5% of the total amount.
The recipients of zakat are eight as Allah mentioned in His saying ﷻ: “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] traveller…” [Qur’an 9:60]
1. One is a Muslim
2. And that it cannot be the father, child or the wife of the person paying the zakat (because he is required to fund them anyway through his general expenses not zakat)
1. A needy person (Faqir): the one who possesses wealth, though it does not amount to a Nisab (minimum amount). In other words, a person who himself does not have enough to pay Zakat is deemed a poor person.
2. A destitute and helpless person (Miskin): the one who does not own anything aside from a few basic necessities of his own. The circumstances of the destitute are worse than that of a needy person.
3. Those employed to collect the Zakat by the Islamic head state.
4. New Muslims – the Prophet (peace and blessings be upon him) would give Zakat to revers to strengthen their faith so that when they returned to their non-believing people, they would preach about Allah and His Messenger (peace and blessings be upon him). (However, later on Sayyiduna Umar (may Allah be pleased with him) discontinued giving Zakat to reverts due to the increasing number of Muslims.)
5. Those people who are enslaved and thus require the means to purchase their freedom from their master.
6. Those people who are in debt and are unable to settle it.
7. The ones striving in the way of Allah, referring to the soldiers whom the Imam equips for war
8. The traveller who has no spending money at hand therefore bringing his journey to a stand-still and rendering him.