Zakat Simplified

Kala Mandir, Kolkata Sunday, 22 June 2014

22/06/14 Zakat Simplified Workshop

Quiz : True or False 1.  Zakat is due every year i.e. if I pay it on 1

January 2014, it will next become due on 1 January 2015

2.  Zakat rate is one-fortieth (i.e. 2.5%) of the value uniformly for all items

3.  A husband can give Zakat to a wife, but a wife cannot give Zakat to her husband

4.  If I have 2 (self-occupied) houses, the extra house is covered under Zakat


Quiz : True or False 5.  Agricultural land is covered under Zakat 6.  Factories are covered under Zakat 7.  Non-essential items like TV, computer, car

etc. are covered under Zakat 8.  The Niyah of Zakat has to be made at the

time of giving Zakat 9.  Zakat can be given to organisations 10. A person not liable to pay Zakat, can accept

Zakat


Answers to Quiz Questions at end of workshop!


Today’s objectives

•  Basics of Zakat •  Who is required to pay Zakat? •  Which are Zakatable Assets? •  How are Zakatable Assets valued? •  Who can we pay Zakat to? •  Intro to www.zakatonline.in


BASICS OF ZAKAT


The Wisdom of Zakat

•  Growth •  Purity •  Balances Inequity •  Direct Benefit Transfer •  Brotherhood •  Reduces Greed •  Best investment


Annual Income

Annual Saving

Wealth / Assets

CONCEPTUAL CLARITY OF ZAKAT

Minus: Expenses


Zakat-able

Assets

Zakat-able

Assets


NISAAB

CHECK…


Zakat-able

Assets

Zakat 2.5%


NISAAB

CHECK…

If Yes


Some Basics

•  Zakat = (Minimum) Obligatory Charity •  To be Paid Annually (lunar year) •  On select items of Wealth •  Valuation as per market price •  To be given only to specified people •  Err on the side of safety


ZAKATABLE ASSETS


Zakatable Assets


Gold & Silver Cash & Equivalent Trade Stock

Livestock Agriculture Produce Buried Treasure / Mines

Livestock •  Only on some animals •  Should be mostly Self

Grazing •  Nisaab –  Camel – 5 –  Cow – 30 –  Goat / Sheep – 40

•  Rates of Zakat –  Step based


Agriculture Production (Ushr) •  No Nisaab •  Not necessary to

Complete one year •  Payable immediately

on harvest •  Rates –  10% if rainfed –  5% if irrigated


Mines / Buried Treasures •  No Nisaab •  No completion of year •  Payable immediately

on extraction •  Mines (Gold, Silver,

Brass, Bronze, Iron etc) –  20%

•  Buried Treasures –  20%


Zakat on Gold & Silver


Zakat on Gold & Silver •  Payable on all Gold & Silver (in use, not in

use, decorative etc.) •  Deduct value of any stones etc. from jewellery •  Value will be as on date of Valuation, in place

where asset is •  In case trader in Gold & Silver, Zakatable but

as ‘Trading Stock’ – no double zakat •  No Zakat on diamonds, pearls, precious

stones, platinum, Rubies etc.


Zakat on Gold & Silver •  Take Value of 24 carat Gold (per gram) – Value of 22 carat gold is 22/24 of 24 carat value – Value of 18 carat gold is 18/24 of 24 carat value –  Ignore workmanship, design costs etc.

•  Silver take rate per Kg (as available in market) – Apply to all silver assets –  Ignore other costs


Zakat on Cash & Equivalents


Zakat on Cash & Equivalents •  This is all liquid wealth which is in cash form

or can be converted to cash at short notice •  In Bank balances, deduct interest since Zakat

is not payable on impermissible income •  Similarly in any investment, if there is any

component of Interest, deduct it •  Loans taken (non-business) should be set-off

from these – Business loans we will set off from trading stock


Zakat on Trade Stock



•  Covers ANY item •  Depends on Niyah when purchased •  Only on production / trading stock – Damaged Goods – Obsolete / Dead Stock

•  Value as per market rate (not cost price) •  Tools of trade are not covered •  Shops / offices / factories not covered 22/06/14 Zakat Simplified Workshop


•  Debtors & Creditors need to be adjusted – Doubtful Debts – Bad Debts

•  Loans taken / given for business also •  Zakat on Partnership Business /

Companies


DEMONSTRATION


My factory


My showroom


My Home


My second home


My home items


ELIGIBILITY FOR PAYING ZAKAT


Conditions for Zakat

•  Muslim, Baligh, Aqil •  Owner & Possessor of the Property •  Completion of one year (Haul)


Sahib-e-Nisaab

•  Gold – 87.48 grams •  Silver – 612.32 grams •  Or Cash or Trade Stock equivalent Nisaab Today (June 2014): Rs. 26,000 approx Haul – as per Lunar Calendar


Sahib e Nisaab


If

Is More Than Rs. 26,000

Then Pay Zakaat @ 2.5% of TOTAL VALUE (not minus Nisaab)

Haul


Lunar Month 1 2 3 4 5 6 7 8 9 10 11 12

Net

Zak

atab

le

Asse

ts

Nisaab

Zakat Payable

on*

(* as per Hanafi Fiqh)

Haul


Lunar Month 1 2 3 4 5 6 7 8 9 10 11 12

Net

Zak

atab

le

Asse

ts

Nisaab

Zakat Payable

on*


Haul


Lunar Month 1 2 3 4 5 6 7 8 9 10 11 12

Net

Zak

atab

le

Asse

ts

Nisaab

Zakat Payable

on*


Haul


Lunar Month 1 2 3 4 5 6 7 8 9 10 11 12

Net

Zak

atab

le

Asse

ts

Nisaab

Zakat Payable

on*


ZAKAT VALUATION / CALCULATION







WHO CAN WE PAY ZAKAT TO?


Wealth / Assets

Non- Essential

Assets

WHO CAN RECEIVE ZAKAT?

Zakatable

Assets


Non- Essential

Assets

WHO CAN RECEIVE ZAKAT?

Zakatable

Assets NISAAB

How to Verify: Taharri


Eligible recipients for Zakat 1.   Faqeer: poor; one who has some money, but not

sufficient for his basic needs 2.   Miskeen: destitute; one who has nothing 3.   Amileen: zakat collector, appointed by the

Caliph 4.   Mu'allafah Qulubuhum : to soften the hearts 5.   Riqaab: to slaves to purchase their freedom 6.   Gharim : one in debt for a legitimate reason 7.   Fi Sabeelillah: in the path of Allah 8.   Ibnis-Sabeel: wayfarer; one stranded away from

home, with no money available to him


People who cannot be given Zakat

•  Non-Muslims •  Well-off people •  Relations of birth – upward and downward •  Relations of marriage •  Employer or Labourer, as wages •  Children of the family of Bani Hashim – Prophet Muhammad’s family, Hazrat Ali’s family

etc •  An organisation / institution (except as agent)


Zakat Payment

•  Neeyah •  Make complete owner •  Not as compensation for work done •  Not only in Ramadan •  Giving Zakat in non-cash form – medicines / clothes / food


Zakat Etiquettes •  Seek out the deserving •  To permitted relatives first •  Give with humility •  Pay in secret, preferably •  Need not mention its Zakat •  Don’t ruin by reminder and

injury •  Need not explicitly mention it

is Zakat


Zakat Neeyah

•  At time of segregation Direct Payment •  At time of payment to recipient •  After payment until it is with recipient Payment Through Agent •  At time of payment to agent •  After payment until it is with agent


WWW.ZAKATONLINE.IN


Why www.zakatonline.in

•  Online site with Zakat information •  Eases Calculation •  Advanced Calculation features •  Allow e-payment •  Partnership with organisations •  Run Campaigns •  Umbrella for charitable causes



www.zakatonline.in


www.zakatonline.in

Lets check: True or False 1.  Zakat is due every year i.e. if I pay it on 1 January

2014, it will next become due on 1 January 2015 –  False. Its due at end of lunar year, not solar year. Hence, every

355 days i.e. after 1 Jan 2014, it would become due around 21 Dec 2014.

2.  Zakat rate is one-fortieth (i.e. 2.5%) of the value uniformly for all items –  False. Although the general rate for standard items (like gold,

silver, jewellery, stock) is 2.5%, it is different for items like agricultural produce (5%-10%) and buried treasures (20%).

3.  A husband can give Zakat to a wife, but a wife cannot give Zakat to her husband –  False. Zakat cannot be given within relation of marriage

(Hanafi Fiqh)


Lets check : True or False 4.  If I have 2 (self-occupied) houses, the extra house is

covered under Zakat –  False. Houses are not covered under Zakat, unless they are

bought with the intention of selling them. 5.  Agricultural land is covered under Zakat

–  False. There is no Zakat on any land, unless it is bought with the intention of selling.

6.  Factories are covered under Zakat –  False. Factories are not covered under Zakat.

7.  Non-essential items like TV, computer, car etc. are covered under Zakat –  False. There is no Zakat on these items.


Lets check : True or False 8.  The Niyah of Zakat has to be made at the time of giving

Zakat –  False. Niyah can be made either at the time of segregation of

Zakat money, at the time of giving Zakah, or even after giving, until it is not used by the recipient.

9.  Zakat can be given to organisations –  False. Organisations are not covered under Zakat recipients.

They can be entrusted Zakat money only as agents to give it to eligible recipients.

10.  A person not liable to pay zakat, can accept Zakat –  False. For a person to be eligible to receive Zakat, not only his

‘Zakatable ‘assets should be below Nisaab but even after adding his ‘non-essential’ assets, it should be below Nisaab.


Remain in Touch

•  Website: www.zakatonline.in •  Email: [email protected] •  sms TSSF ZAKAT <email address> to

07860005444


Thank You

Spiritual

Zakat Simplified