Zakat – ‘Purification of Wealth and Soul’

Zakat – ‘Purification of Wealth and Soul’ Workshop 1

Topics to be covered – 6/6/2014 • Philosophy & Importance of Zakat. • Spiritual & worldly benefits, rewards & warnings. • Discharging Zakaat with Niyyat of gratitude and Allah’s pleasure. • Definition of Nisab, Gold, silver and cash, other assets subject to Zakat. • Conditions of wujoob, • Rate of Zakat, • When to pay Zakat, Hawlaan-e-Hawl, pre-payment of Zakat. Missed Zakat. • Basic necessities, • Related Masaa’il.

Zakat - meaning • Zakat • lexically: purification, increase • Islamic law: proprietary transfer (tamleek) of a portion of wealth specified as per shariah (2.5%) to a poor Muslim who is not a Hashimite in a manner that excludes all benefit to the payer for the pleasure of Allah Taala. • Zakat is a monetary devotion and an Ibaadat that has been ordained in Shariat • Zakat is the 3rd Pillar of Islam and is mentioned throughout the Holy Quran • On 32 occasions it appears in conjunction with wealth. [Radd al-Muhtar] • It purifies the rest of the wealth - The Holy Prophet (peace be upon him) has said: “Allah has made it a source of purification for your wealth”[IbnMajah and Baihaqi]

Virtues and benefits • It also purifies one’s inner qualities - The Holy Quran says: • "Allah destroys wealth obtained from interest and will give increase for deed of charity“ [Baqarah: 276] • “Take out of their wealth a sadaqah (obligatory alms) by which you may cleanse and purify them.”[At-Taubah: 9:103] • Economic benefit to the poor and mould you into a giving person

Warnings • The Messenger of Allah (peace be upon him) said: ‘Whomsoever Allah has bestowed with wealth and he does not pay its Zakat, that wealth will be made to appear before him on the Day of Judgement in the form of a bald serpent with two black spots. His neck will be encircled therewith on the Day of Resurrection. Then it will hold him with its two jawbones and say: “I am your wealth, I am your hoarded treasure.” [Bukhari & Muslim] • Punishment not only after death.. ‘The nation that does not give Zakat, Allah will bring about a drought on them (i.e. necessities of life will become scarce)’

Conditions of Wujoob Conditions to be fulfilled for Zakat to be payable • Muslim • Adult (reached puberty) • Sane • Sahib Un-Nisab (owner of wealth equal to or above Nisab level) • Ownership • Asset held for a year

Recipients of Zakat • Primary recipients of Zakat are poor and destitute • Poor are defined as those people whosenet assets(excluding basic necessities suchas house, food, clothing, furniture etc) are below the Nisab threshold. [al-Durr al-Mukhtar] • A person’s poor relatives should be given preference when distributing Zakat to other poor people.

Zakat Payers and Recipients Those barred from receiving Zakat • Certain Hashimites • Payer’s lineal descendants (child, grandchild, etc) • Payer’s lineal ascendants (parent, grandparent, etc) • Payer’s spouse Conditions for validity of Zakat • Intention at disbursement or at separation of amount payable • Eligibility of Recipient • Recipient’s ownership (cannot pay to Masjid / hospital) • Pre-paying Zakat

Personal Assets IMPORTANT RULES • All assets owned for PERSONAL USE are exempt from Zakatexcept Cash, Gold &Silverwhich are always subject to Zakat • Zakat is always paid on the balance of the assets owned on the zakatable anniversary and not any fluctuating figure during the year • Zakat is NOT payable on Haramincome. This must all be donated to charity • If a Gold/Silver asset is owned for personal use and is made from a mixture of metals including Gold or Silver then Zakat is only payable if Gold/Silver form the majority of the asset • Gold-plated personal jewellery is therefore not subject to Zakat due to above

Wealth subject to and exempt from Zakat

Nisab • Nisab was set by Prophet Muhammad (SAW) at 20 Mithqal of gold or 200 dirhams of silver. • Stipulated amount • Specified different amounts for Gold & Silver • On current [03/06/14] market rates the Nisab level is • £2,084.64 for Gold (£23.83/gram for 87.48grams) • £214.32 for Silver (£0.35/gram for 612.43grams)

When To Give Zakat • Zakat only paid when you are at or above the Nisab level on your Zakat anniversary. • If a person cannot remember the date upon which he/she first become Sahib un-Nisab then one should make the best estimate. If an estimate cannot even be made then a date should be selected which is then stuck to each lunar year. • The selected date does not have to be in Ramadhan. It is however more virtuous to donate in Ramadhan than at any other time. • Zakat should be distributed as soon as possible, at the very latest within 1 lunar year of the calculation date. • Missed Zakat should be calculated to best of one’s ability and paid.

The Niyyat (intention) of Zakaat. • It is Fardh to form niyya (intention) for the fulfillment of Zakat. • When giving Zakat to a needy person, the Niyyat should be that, "I am giving this as Zakat." If the Niyyat is not made the Zakat will not be valid. • It is not necessary to reveal to the needy person to whom Zakat is given, that the cash or kind which is being given to him is Zakat. • When one has put aside an amount for Zakat with the intention that he will give it to the needy, and at the time of giving Zakat he forgets to make the Niyyat, the Zakat will still be valid. • If one gives a deserving person some money as a gift but makes the Niyyat of Zakat, the Zakat will be valid.

Overview • ADDPERSONAL ASSETS (GOLD, SILVER & CASH ONLY) • ADDFULL VALUE OF BUSINESS ASSETS IF INTENTION IS TO RESELLIMMEDIATELY • ADDZAKATABLE VALUE ONLY, NOT FULL VALUE OF BUSINESS ASSETS IFINTENTION IS NOT TO RESELL IMMEDIATELY (properties, shares, pensions, business stock and cash) • ADD[qualifying] DEBTS owed to you by others • SUBTRACT[qualifying] debts you owe to others • PAY 2.5% ZAKAT on total if it equals NISAB

Summary • Zakat is the 3rd Pillar of Islam and compulsory if you are Sahib Nisab • Zakat is a purification of one’s wealth and a right of the poor over the rich • Failure to pay Zakat at all or to under pay Zakat is a major sin • Those whose total wealth, excluding basic necessities and debts is below Nisab level can receive Zakat. • Zakat should be calculated promptly on the annual Zakat date and then paid as soon as possible, at the latest within one year.

Summary …2 • Three main assets are subject to Zakat : • Gold & Silver • Cash • Business assets • Business assets include shares, pensions, CTF, home purchase plans, properties • Debts receivable from others are added to Total Assets in the Zakat Calculation • Debts payable to others are subtracted in the calculation • Zakat is payable at 2.5% on Net Assets

Future Sessions Session 2 - 13th June Session 3 – 20th June • Recipients of Zakat, eligible & ineligible recipients. • Explanation of Tamleek & Fee Sabilillah. • Jewellery & Zakat • Business & Zakat • Pensions & Zakat • Shares & Zakat • Debts & Zakat • Mortgage and Zakat • CTF & Zakat • Responsibility of discharge • Related Masaa’il • Zakat calculation – practical example with demonstration of calculation • Miscellaneous Masaa’il • Answering questions from previous sessions.

Zakat – ‘Purification of Wealth and Soul’