Paying zakat twice

[USResident]

Can anyone provide a reference from Quran or Hadith where it says that wealth on which zakat has been paid has to be paid again unless more wealth was gained?

For instance if you have $10000. You paid $250 zakat on it. You have already paid zakat on that wealth and purified it. Now after a years times, if no change occurs to your wealth meaning you have not accumulated more wealth on top of the initial $10000 you had then you have to pay zakat on that wealth again. Or if your wealth decreased from $10000 to $5000 then you have to pay zakat on that again even though you have lost wealth and you have already paid zakat on it before.

[USResident]

Re: Paying zakat twice

Interesting nobody knows.

[Hum_Hain_Lajawab]

Re: Paying zakat twice

^ Walaikum Asslaam,

Wouldn't it be better to not respond if you don't know or have doubts rather than post as if you know even though you don't? :)

[SindSagar]

Re: Paying zakat twice

You should confirm with a scholar, but Zakat is always on the Savings at the end of the year...................every year 2.5%.

[USResident]

Re: Paying zakat twice

@SindSagar

You should confirm with a scholar, but Zakat is always on the Savings at the end of the year...................every year 2.5%.

Thats the tradition we follow, where are the roots for such a tradition. Zakat is supposed to purify your wealth, it is not a tax in all aspects. Zakat is not supposed to be a drain on your wealth as we practice it. And its not every year year its when your wealth reaches the nisab amount and stays above it for a year and even if it declines but climbs back before the year is over.

And even nisab is not etched in stone (this is my opinion which is totally in contrast to the preset and predfefined value of nisab and all scholarly concensus, which I think is the value of 85 grams of gold). Nisab when originally prescribed was an amount enough to sustain your family with its regular needs for a year. This important aspect has not been translated into modern times for the amount of nisab. A person possessing wealth equal to nisab today in USA cannot live out barely a month on it and then he should pay zakat. Zakat is for the rich not the poor. We pay zakat as a religious obligation without even understanding its concept and circumstances.

[USResident]

Re: Paying zakat twice

@Hum_Hain_Lajawab

^ Walaikum Asslaam,

Wouldn't it be better to not respond if you don't know or have doubts rather than post as if you know even though you don't? :)

Granted. I just posted this because it is very thought provoking in understanding the true economic aspect of zakat. Scholars have elaborate theories to support their stance but it defies all logic and common sense if you understand what zakat achieves for the rich. It provides them little economic benefit, it is to purify their wealth. It provides economic benefit for those who are poor. Its purpose in my opinion is not to establish an equilibirum by draining the wealth from one and tranfering it to another, no. If that were the case then the state can just distribute common earning to all its citizens irrespective of their jobs.

[Sa1eem]

Re: Paying zakat twice

USResident: Brother, it is wrong assumption that Zakat is to purify your wealth. Zakat is what Allah has made obligatory on Muslims who believe, and that is nothing to do with purifying anything, it is to do with obeying command of Allah.

Now, apart of Allah sending Quran, Allah sent prophet (SAW) to teach Islam. It was duty of Prophet (SAW) that Prophet (SAW) teaches everything about Islam to Muslims around him. Every thing that was obligatory on Muslims from Allah, Prophet (SAW) taught all Muslims of his time, and did that if he was in the situation to do that.

Thus, Islam consists of two things. One is Quran that we all can read. Another is what Prophet (SAW) showed or told Muslims to practice (Sunnah). All Muslims during the time of Prophet (SAW) knew that and they told all new Muslims and their children. So Sunnah is coming down to Muslims, generation to generation, from Prophet (SAW) to all Muslims at present, without any narrators in between or any doubt of its being distorted.

We all learn (see, hear and practice) this Sunnah of Prophet (SAW) as we grow, from elders around us, who learned in same way when they were young from their elders around them, who learned same way as our elders did, and so on until we reach the time when Muslims learned that from Prophet (SAW). New Muslims (converts or some like to call reverts) learn Sunnah from other Muslims around them. So, all Sunnah is preserved amongst Muslims in this way (within the body of Ummah), and when we see any variations, the reason is that they are not strict part of Sunnah or command of Allah, and thus Prophet (SAW) use to vary them in his actions too, and those that followed took what they felt as most suitable for them, but later Muslims made them obligatory and now fight with each other on that.

Now coming to your question, we learn that Propjet (SAW) told Muslims to give Zakat every year on savings that stayed with them for a year and on goods they held for one year (including property) that are not in their use, or any other wealth held for one year that they claim to be theirs (like loan to others). From Prophet (SAW) we also know that 2.5 percent is value of Zakat on the value of most things.

Anyhow, since 2.5 percent Zakat is to be given on all saving held for one year, every year, and this teaching of Prophet (SAW) effected many Muslims during the time of Prophet (SAW), all Muslims even today knows this ruling without doubt, coming to us from generation to generation. So, there is no doubt on this issue, that Zakat should be given on all savings that one hold for one complete year, regardless of Zakat is given on same savings in previous years or not.

[SindSagar]

Re: Paying zakat twice

@SindSagar

You should confirm with a scholar, but Zakat is always on the Savings at the end of the year...................every year 2.5%.

I also believe if you have a loan that is larger than the Zakat you owe, then there is exemption...............to what extent you need to check for yourself.

[goodnews]

Re: Paying zakat twice

@SindSagar

I also believe if you have a loan that is larger than the Zakat you owe, then there is exemption...............to what extent you need to check for yourself.

Mufti/mulana SindSagar is right

[SindSagar]

Re: Paying zakat twice

@goodnews

Mufti/mulana SindSagar is right

***La hoala wala quwata......... you should not "make light" these titles by calling "Sin.Sagar" the sinner a "Mufti"........:(

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[psyah]

Re: Paying zakat twice

@USResident

Granted. I just posted this because it is very thought provoking in understanding the true economic aspect of zakat. Scholars have elaborate theories to support their stance but it defies all logic and common sense if you understand what zakat achieves for the rich. It provides them little economic benefit, it is to purify their wealth. It provides economic benefit for those who are poor. Its purpose in my opinion is not to establish an equilibirum by draining the wealth from one and tranfering it to another, no. If that were the case then the state can just distribute common earning to all its citizens irrespective of their jobs.

Peace USResident

Nice question! I believe the method that has been practiced to date is wholly correct. You are totally correct that zakat is there to purify ones wealth. However, please also look at the strong evidence of Islam promoting sadaqah.

Zakat in a more dynamic sense does not bring everyone towards the same status nor does it attempt to do that. Zakat encourages support for the poor, but it's purpose is to earn Reward for the Hereafter. Cash flow is the effective power of a given business person. The savings are basically the amount of money dormant of no use that has remained in that state for 1 year. If it is a case for undertaking zakat on all incoming money then you will find that you will be paying much more.

If person x earns $50,000 per month and you assume that this amount needs purifying then every month the person will have to pay $1,250 every month that makes ... $15,000 ...

If person x earns $100,000 per month but only saves $500 per month then the zakat that is payable is on $500 x 12 = $150.

If you ignore the word 'savings' then you must apply your ruling on all cash. If you don't ignore the word 'savings' then you must continue to apply the rule on all savings. The other option cannot be considered.

The amount a person saves will be proportional to the amount he/she earns by paying the zakat. It does not mean that the zakat continually make the rich poorer, because if in year 1 person x can save $20,000 then even if the zakat on this is paid taking the total to $19,500 the following year another potential $20,000 can be saved taking the total to $38,512.5 ... In fact if a person can save $2,000 per year then the zakat will not reduce the total but rather cap it or prevent it from getting higher than a certain amount. For such a person the total amount in saving will never exceed $78,000 because approx every year the $2000 are saved there are $2000 that are to come off for zakat. The only way the amount reduces is if the saving has occurred and no more money is being put towards the amount.

[USResident]

Re: Paying zakat twice

@psyah

Peace USResident

Nice question! I believe the method that has been practiced to date is wholly correct. You are totally correct that zakat is there to purify ones wealth. However, please also look at the strong evidence of Islam promoting sadaqah.

Zakat in a more dynamic sense does not bring everyone towards the same status nor does it attempt to do that. Zakat encourages support for the poor, but it’s purpose is to earn Reward for the Hereafter. Cash flow is the effective power of a given business person. The savings are basically the amount of money dormant of no use that has remained in that state for 1 year. If it is a case for undertaking zakat on all incoming money then you will find that you will be paying much more.

If person x earns $50,000 per month and you assume that this amount needs purifying then every month the person will have to pay $1,250 every month that makes … $15,000 …

If person x earns $100,000 per month but only saves $500 per month then the zakat that is payable is on $500 x 12 = $150.

If you ignore the word ‘savings’ then you must apply your ruling on all cash. If you don’t ignore the word ‘savings’ then you must continue to apply the rule on all savings. The other option cannot be considered.

The amount a person saves will be proportional to the amount he/she earns by paying the zakat. It does not mean that the zakat continually make the rich poorer, because if in year 1 person x can save $20,000 then even if the zakat on this is paid taking the total to $19,500 the following year another potential $20,000 can be saved taking the total to $38,512.5 … In fact if a person can save $2,000 per year then the zakat will not reduce the total but rather cap it or prevent it from getting higher than a certain amount. For such a person the total amount in saving will never exceed $78,000 because approx every year the $2000 are saved there are $2000 that are to come off for zakat. The only way the amount reduces is if the saving has occurred and no more money is being put towards the amount.

However the difference is when the savings are not merely savings but an investment though still existing in monetary form. In the other thread about the 401K, the difference between the 401K savings and regular saving of wealth is that the 401K wealth is not merely savings, it is an active investment which is subject to profit and loss. Let me give an example, zakat is levied on produce but not on the land itself which is being used for growing the produce. The produce is actually the income earned from the land (which is an investment to say). So savings which are actually investments are similar, the dividends you get are the income.

If I have savings that are idle and not invested, then I agree it is subject to zakat ul maal. Centuries ago there was no form of investment in which money remained in monetary form and still could grow, investment had to be bartered in the form of trade goods.

I am looking for a parable where your savings is your earning and zakat is levied on it. So far I have found none in historical context.

My original question is still unanswered as well. None of the texts indicate the wealth on which zakat has been paid needs to be paid again unless it is new wealth.

Just so you know my own stance, I pay zakat yearly irrespective of whether I have paid on it before. This I do out of spiritual obligation but not out of the rationale that is prevalent today. I do not agree with it because it so far has no founded bases and that is what I am seeking by playing the devils adovcate here. What I am stating here is not what I actually do in real life. But we should objectively think about the rationales that are presented to us and see if they are in line with the texts we have.

[Furqan]

Re: Paying zakat twice

as for canadians living in the west...Where can they send out their zakat ? Can zakat be given to a person in the family whos suffering from major financial crisis?

[USResident]

Re: Paying zakat twice

Nice to hear from you brother. Look forward to a nice and informative discussion.

@Sa1eem

USResident: Brother, it is wrong assumption that Zakat is to purify your wealth. Zakat is what Allah has made obligatory on Muslims who believe, and that is nothing to do with purifying anything, it is to do with obeying command of Allah.

Brother, I disagree with this because Zakat purifies ones wealth. When I say purify I mean that it saves you from the Azaab which it entails if not disposed of, not as if wealth is an impure thing. This hadith in Bukhari makes it evident. Anything that essentially is saving you from punishment in the hereafter is purifying you from sin.

Allah’s Apostle said, "Whoever is made wealthy by Allah and does not pay the Zakat of his wealth, then on the Day of Resurrection his wealth will be made like a bald-headed poisonous male snake with two black spots over the eyes. The snake will encircle his neck and bite his cheeks and say, ‘I am your wealth, I am your treasure.’ " Then the Prophet recited the holy verses:-- ‘Let not those who withhold . . .’ (to the end of the verse). (3.180).

003.180**
YUSUFALI: And let not those who covetously withhold of the gifts which Allah Hath given them of His Grace, think that it is good for them: Nay, it will be the worse for them: soon shall the things which they covetously withheld be tied to their necks Like a twisted collar, on the Day of Judgment. To Allah belongs the heritage**

@Sa1eem

Now, apart of Allah sending Quran, Allah sent prophet (SAW) to teach Islam. It was duty of Prophet (SAW) that Prophet (SAW) teaches everything about Islam to Muslims around him. Every thing that was obligatory on Muslims from Allah, Prophet (SAW) taught all Muslims of his time, and did that if he was in the situation to do that.

No doubt in this.

@Sa1eem

Thus, Islam consists of two things. One is Quran that we all can read. Another is what Prophet (SAW) showed or told Muslims to practice (Sunnah). All Muslims during the time of Prophet (SAW) knew that and they told all new Muslims and their children. So Sunnah is coming down to Muslims, generation to generation, from Prophet (SAW) to all Muslims at present, without any narrators in between or any doubt of its being distorted.

This is how we learnt salah no doubt however the ahadith have indicators to the veracity of the practice as well. I am just playing the devils advocate here and saying that if you were to read the ahadith there are no indicators about the way it is practiced. Quran in every instance mentions “practice regular charity …”, how do we define regular? The ahadith do not provide the definition of this regularity anywhere. Ahadith only convey the criteria for determining the portion of zakat to be paid and what it become eligible for zakat. I am trying figure if the rationales behind regular sadaqah are mixed up with zakat.

@Sa1eem

We all learn (see, hear and practice) this Sunnah of Prophet (SAW) as we grow, from elders around us, who learned in same way when they were young from their elders around them, who learned same way as our elders did, and so on until we reach the time when Muslims learned that from Prophet (SAW). New Muslims (converts or some like to call reverts) learn Sunnah from other Muslims around them. So, all Sunnah is preserved amongst Muslims in this way (within the body of Ummah), and when we see any variations, the reason is that they are not strict part of Sunnah or command of Allah, and thus Prophet (SAW) use to vary them in his actions too, and those that followed took what they felt as most suitable for them, but later Muslims made them obligatory and now fight with each other on that.

Agreed. This is not a rationale though, this same line of reasoning became an impediment in the few years after the birth of Islam, everyone followed what they saw there forfathers following and did not wish to deviate from it, it did not mean it was correct. Islam infact defied this line of reasoning encouraging people to think about things objectively.

@Sa1eem

Now coming to your question, we learn that Propjet (SAW) told Muslims to give Zakat every year on savings that stayed with them for a year and on goods they held for one year (including property) that are not in their use, or any other wealth held for one year that they claim to be theirs (like loan to others). From Prophet (SAW) we also know that 2.5 percent is value of Zakat on the value of most things.

No this is what I am saying, paying zakat is not a yearly obligation. It is an obligation when a year has lapsed and your wealth was above the nisab when the year started and even if it dipped below during the year but at the end of the year if it increased above the nisab then it is subject to zakat. So if if dipped below the nisab and stayed that way after a year has lapsed or even two ot three years have lapsed then there is no zakat on it.

@Sa1eem

Anyhow, since 2.5 percent Zakat is to be given on all saving held for one year, every year, and this teaching of Prophet (SAW) effected many Muslims during the time of Prophet (SAW), all Muslims even today knows this ruling without doubt, coming to us from generation to generation. So, there is no doubt on this issue, that Zakat should be given on all savings that one hold for one complete year, regardless of Zakat is given on same savings in previous years or not.

The basis of my question is how do we differentiate between savings and investment if both reside in the form of money. Savings is idle whereas investment money is being actively used.

[psyah]

Re: Paying zakat twice

@USResident

The basis of my question is how do we differentiate between savings and investment if both reside in the form of money. Savings is idle whereas investment money is being actively used.

Peace USResident

I think I know what you are saying now. Either the investment is considered a loan then the rules of the loan applies.

Or the rules of businesses apply that is 2.5% on the max-min for that year. I think that is the same thing suggested by yourself. Muftis have said for businesses they can see what the lowest point has been in a given year and what the highest point has been then to take the difference and apply 2.5% on that difference would be equal to the zakat for that business.

[USResident]

Re: Paying zakat twice

Peace USResident

I think I know what you are saying now. Either the investment is considered a loan then the rules of the loan applies.

Or the rules of businesses apply that is 2.5% on the max-min for that year. I think that is the same thing suggested by yourself. Muftis have said for businesses they can see what the lowest point has been in a given year and what the highest point has been then to take the difference and apply 2.5% on that difference would be equal to the zakat for that business.

Somewhat, I really wanted to take your 401K discussion forward here though with different paramters, ones that I have outlined in this thread. I am not refering to money as in loans here.

Savings = Money (excess money)
Investment = Money (say 401K)

You pay zakat on savings.
Not all investments are subject to zakat but there incomes are e.g. rental income not the property, produce but not the land, trade goods not the shop itself. So the general pattern is that the means is not subjects to zakat but the income generated from it.

This is indeed very confusing. You do not give zakat on what you live off of, you give zakat on what is in excess. So for instance, if you after retirement get to cash your 401K money. This money is now what you will be living off of, it is not your excess wealth because you no longer have an income other than this. If I had a job that meets my needs after retirement then I can consider my 401K savings as excess but once my source of income is gone, that savings is essentially my income, it is no longer excess wealth for me. I have to ration how much I spend from it or curtail according to inflation. The status of that wealth changes with your situation as well. Just because it is a huge sum of money does not mean it has to be regarded as the same kind in every circumstance. Consider the permissibility of giving zakat to help a rich traveler in need of money. His status is such that his wealth is of no avail to him and he becomes eligible to zakat. The same way the status of wealth is not always the same irrespective of its amount. Another example is wealth in the form of jewelry, which has no zakat if it is in use by most scholarly concensus but if it is in excess to normal use than it is subject to zakat. So the status of wealth depends on its usage not the amount necessarily and therefore its subjection to zakat also changes.

The individual financial needs of people today is different than what they were centuries ago as well. In the past your wealth was only used to buy your sustenance and few other things, that is not the case today where our society and living has become so diverse that we can apply blanket principles to anything where money is concerned.

[SindSagar]

Re: Paying zakat twice

Somewhat, I really wanted to take your 401K discussion forward here though with different paramters, ones that I have outlined in this thread. I am not refering to money as in loans here.

Savings = Money (excess money) Investment = Money (say 401K)

** You pay zakat on savings.** *** Not all investments are subject to zakat but there incomes are ***e.g. rental income not the property, produce but not the land, trade goods not the shop itself. So the general pattern is that the means is not subjects to zakat but the income generated from it.

This is indeed very confusing.

***I think you have answered your question here. the important thing to remember is that Zakat is Mandatory on Gold and Silver. since these do not generate income!

similarly savings is like dormant funds, but your 401K is invested in risk taking ventures like common stock share where you do not have control of the Capitol until they are sold, but the dividends that you recieve from shares if end up in your savings at the end of the year would require you to pay Zakat from those.

Interesting Topic...........Thanks for posting!

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[USResident]

Re: Paying zakat twice

I think you have answered your question here. the important thing to remember is that Zakat is Mandatory on Gold and Silver. since these do not generate income!

Not necessarily. Depends on what form. Centuries ago you could investment gold and silver coins and watch mutiply as todays paper currency does. Gold and silver was a commodity with fixed value by weight. It was a valuable commodity when used to barter goods. Gold and silver in the form of jewelry is always subject to zakat. Even the standard by which it becomes subject to zakat differs from the user to user depending on how much jewlery one is used to wearing.

[SindSagar]

Re: Paying zakat twice

@USResident

Not necessarily. Depends on what form. Centuries ago you could investment gold and silver coins and watch mutiply as todays paper currency does. Gold and silver was a commodity with fixed value by weight. It was a valuable commodity when used to barter goods. Gold and silver in the form of jewelry is always subject to zakat. Even the standard by which it becomes subject to zakat differs from the user to user depending on how much jewlery one is used to wearing.

***OK, so not counting the jewelry you wear, the remaining if over the Nisab is used to figure the amount of Zakat due every year.......................on the same jewelry you paid on last year!

does that answer your question?

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[USResident]

Re: Paying zakat twice

OK, so not counting the jewelry you wear, the remaining if over the Nisab is used to figure the amount of Zakat due every year.......................on the same jewelry you paid on last year!

does that answer your question?

Close enough.