To maintain a flow of wealth from the upper strata of society to the unprivileged, Islam introduces the concept of Zakat. According to Islamic traditions, every Sahib-e-Nisab has to pay 2.55 of his/her assets as Zakat to the needy and poor people of the society.
It is one of the five pillars of Islam, and every year all privileged Muslims across the world donate a specific percentage of their wealth to the poor, especially during the month of Ramzan. This helps to maintain a balance in society.
Islam has set an obligatory threshold on the savings and assets for all Muslims to make it easier for them to calculate their Zakat. Graana.com has prepared a guide for you below.
If the total value of all the assets that a person possesses is more than 7.5 tola/3 ounces/87.3 grams of gold, or 52.1 tola/21 ounces/612.36 grams of silver during a full lunar year, he/she is eligible to pay Zakat.
However, as gold is no longer used as a form of currency, you can convert the total value of gold or silver to your local currency.
For example, if you are living in Pakistan, then the rupee will be used as a currency of conversion. Let’s discuss a practical calculation to help you better understand the conversion process.
Rate of Gold in Pakistan * 7.5 tola/3 ounces/87.3 grams of gold = Gold Nisab
Rate of Silver in Pakistan * 52.1 tola/21 ounces/612.36 grams of silver = Silver Nisab
Let’s assume that the rate of gold per tola on a specific day of 2023 is Rs. 223100. So,
Rs. 223100 * 7.5 tola = Rs. 1,673,250
Now, let’s calculate the Zakat Nisab according to the silver standard at a rate of Rs. 1600 per tola.
Rs. 2419 * 52.1 = Rs. 126,029.9
From the above calculation, we can conclude that a person with assets worth more than Rs. 1,024,372 is a Sahib-e-Nisab, and he/she is eligible to pay Zakat according to the Gold Nisab. Similarly, a person with assets worth above Rs. 83,360 is a Sahib-e-Nisab according to the silver standard.
The most important thing to consider here is that the assets must be worth above the Nisab limit during a full lunar year. If the assets are below the Nisab limits, you are not a Sahib-e-Nisab.
Moreover, the Zakat calculation date will be the first day once you have assets above the Nisab limit. However, if you are Sahib-e-Nisab all year, you can set a date accordingly. Many people prefer Ramadan to pay their Zakat.
When it comes to paying Zakat, choosing a Nisab can be difficult. According to several hadith and practices of Prophet Muhammad (PBUH), silver Nisab is considered more Afzal and rewarding for both the recipient and the giver. A lower threshold due to silver Nisab allows the givers to donate more Zakat and, thus, help more people in need.
If all your savings and assets are in the form of gold, then you should use Gold Nisab. However, if you have mixed assets such as real estate, company shares, business, or commodities, then you should use the silver Nisab.
Consulting a practising Aalim-e-Deen for advice can also be a good option to calculate Zakat according to the right Nisab.
Several organisations have introduced different Zakat calculators, which are according to the right Nisab standards for each year.
You can take help from these to calculate your Zakat accurately. You can also take help from the ulema as well.
According to different traditions set by ulema in the light of the Quran and hadith, the following assets are subject to Zakat:
The list above is based on the Qur’anic reference to items subject to Zakat is rather general.
Surah Al-Taubah (9:103) mentions the word “amwal” (meaning “worldly possessions” or “wealth” in Arabic) and Surah Al-Baqarah (2:267) says, “What you have earned,” and “What we have produced for you from the earth”.
In the time of the Prophet Muhammad (peace be upon him), Zakat was paid on the following:
However, certain items were exempt, such as items used for personal purposes like clothes and household furniture.
According to different ulema, the following liabilities are excluded:
Masarif-e-Zakat stands for the “recipients of Zakat” or those who are eligible to receive Zakat. Whether it is the Zakat of dignity or the Zakat of Shria, the Masarif-e-Zakat remains the same.
Allah Almighty has clearly categorised the Masarif-e-Zakat in Quran in the following words:
“Indeed sadaqah is for Fakirs, Masakeen and for Amileen (those deployed to collect zakat), those in whose hearts the inculcation of love for Islam is aimed at, and to free the captives and remove the burden of debtors and (those who toil hard) in the way of Allah and for the wayfarers.
This has been prescribed by Allah. Allah, the All-Knower, the Most Wise.” (9:60)
According to the above Ayah of the Quran, the following are the 8 categories of Masarif-e-Zakat:
Zakat has been mentioned at least 82 times in the Holy Quran, which explains why it is so important in the Islamic economic system. Generally, Zakat has significance in the following three domains of life:
Islam focuses on community sustainability and Zakat is the main engine that drives this sustainability. It helps to circulate wealth in society and keep a balance. The following are some social benefits of Zakat:
An economic balance in society is a must for its survival, which is why Islam introduced the concept of Zakat. The following are some of its economic benefits:
It is a spiritual connection to the Creator – to purify your wealth for the will of Allah is to acknowledge that everything we own belongs to Him. For Him, we strive to end poverty and help our brothers and sisters. It cleanses our higher souls from the taint of their base natures.
For more related information, visit the Graana blog.
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