Zakat Question

[AQ]

Re: Zakat Question

@fair_&_balance

Can you explain in plain english or Urdu?

sure…

let me rephrase:

When the person becomes eligible as **Saahib-e-Nisaab, **his/her year starts thereafter and if the person remains Saahib-e-Nisaab at end of the year, the easiest way IMO is to pay zakah on the amount currently present at the end of one year.

[mAd_ScIeNtIsT]

Re: Zakat Question

I have (alhumdullillah) a healthy amount of money in the bank. However, I have debts that exceed the value of money in the bank, which I'm paying off over the next couple of years.

Do I

a) Pay zakaat on what I have in the bank
b) Or do I not have to pay zakaat because I have greater debts than money in the bank - ie my net worth is less than zero?

So far every year, to be safe rather than sorry I pay zakaat on the full amount in the bank.

[AQ]

Re: Zakat Question

^
My understanding is that if a person who lends the money is muslim then it is his responsibility to pay the zakaah on such money. Since, it is not your money, and being in such situation, you can't be Saahib-e-Nisaab, zakaah is not fardh on you. You should check it with a scholar and confirm it. Wallaho Alam!

[armughal]

Re: Zakat Question

paying zakat based on the minimum balance during the year can not be justified in any way....

either u pay for all that u have in ur account....

or u calculate for each month separately....

if someone wishes to debate, i can put up a 24 months imaginary balance statement and we can see how it wud be wrong to pay off the zakat for the minimum balance in the year....

simple example here:
month 0, balance = 1000 (u pay zakat on it)
month 3, u put in 5000
month 12, total balance = 6000 (but u believe that the 5000 has not yet been a year with u so u dont pay zakat on it, instead u pay zakat on the minimum balance, i.e. 1000)
month 17, u use up 4000 from the money and u r left with 2000
month 24, thru the year minimum balance is 2000, and u pay zakat on it....

now, the 500 has remained with u from month 3 to month 17 (obviously more than a year) but never paid off zakat for it....
why???? the minimum balance thing doesnt cover it....

had u paid off zakat on the full balance, u wud have covered it....
and if u had calculated ur zakat on every month (a complicated procedure and difficult to keep track of) u wud have saved urself....

hence the most reliable and easy way out is....????

[AQ]

Re: Zakat Question

@armughal

hence the most reliable and easy way out is…???

to pay the zakaat on the balance at the end of year for by definition the money which ‘survives’ for one year should have a zakaah taken out on it.

[Faisal]

Re: Zakat Question

Lets get our basic facts correct. Zakat is due on money that remain “unused” throughout the year. If your balance in the bank goes up and down throughout the year, then the money is being used. The minimum amount for the entire year, is the money you never “touched” during the year, and that is your excessive wealth, on which you have to pay zakat.

By the way, year is hijrah year (Ramadan 1st to Ramadan 1st)

Here is a zakat calculator for you.
http://soundvision.com/Info/life/zakatcalc.asp

[armughal]

Re: Zakat Question

^ faisal bhai, in the example i gave, 4000 was unused for mor than a year, but the minimum amuont method never accounts for it....

[Faisal]

Re: Zakat Question

In the example you gave, you don't pay zakat on month 0 unless you have had that $1,000 with you for an entire year prior to that.
For year 1 (assuming your year is Ramzan 1 to Ramzan 1), your unused balance is $1,000. You pay zakat on that balance.
For year 2, your unused balance is $2,000. You pay zakat on that balance.

I don't see any additional $500 in the example. You close your year at Ramzan 1st and compute zakat. Not take intervening periods (e.g. Months 3 to 17 etc) and come out with new balances all the time.

Secondly, what I do is compute the zakat on Ramzan 1st, and put the amount in a separate account. I don't have to give all of it away on day one. I try to give it away as quickly as possible, but still look for best sources of utilization. Technically you can keep giving out the zakat money throughout the year to deserved people and causes. However, that doesn't change the fact, that the annual computation of zakat due is made on Ramzan 1st.

[fair_balance]

Re: Zakat Question

Reviving this thread. I thinlk it will be good idea to spent your Zakat for the relief funds.
Please do the due deligence in turms of making sure your money is spent as per Zakat rules.
Any knowledgable person can comment on this.

[Sadiyah]

Re: Zakat Question

f&b, thanks for reviving it. The zakah could most certainly be given to those affected by the earthquake in Pakistan.

[fair_balance]

Re: Zakat Question

if you donate at www.Hidaya.org then you can mention if it is Zakat money and they will spend accordingly

[deedawar]

Re: Zakat Question

@Faisal

In the example you gave, you don’t pay zakat on month 0 unless you have had that $1,000 with you for an entire year prior to that.
For year 1 (assuming your year is Ramzan 1 to Ramzan 1), your unused balance is $1,000. You pay zakat on that balance.
For year 2, your unused balance is $2,000. You pay zakat on that balance.

I don’t see any additional $500 in the example. You close your year at Ramzan 1st and compute zakat. Not take intervening periods (e.g. Months 3 to 17 etc) and come out with new balances all the time.

Secondly, what I do is compute the zakat on Ramzan 1st, and put the amount in a separate account. I don’t have to give all of it away on day one. I try to give it away as quickly as possible, but still look for best sources of utilization. Technically you can keep giving out the zakat money throughout the year to deserved people and causes. However, that doesn’t change the fact, that the annual computation of zakat due is made on Ramzan 1st.

This one seems close to what is required and I try to follow this method.
All liquid assets left unused for one year from ramadaan to ramadaan must be calculated. In general, 401K or anything related money would have up to 30% interest and 10% penalty. Check with finance company individually.

Calculating slightly more than what the actual 2.5% gives a safe margin.

Intention is important but I think you do not have to tell the receiver of the money that its zakat?

Q: Can zakat money be given for wedding ceremony in which off course we know money will be spent on big meal etc. due to ‘social pressure’ on lets say, the girl side, and which we may not have any control on?

[armughal]

Re: Zakat Question

@Faisal

In the example you gave, you don’t pay zakat on month 0 unless you have had that $1,000 with you for an entire year prior to that.
For year 1 (assuming your year is Ramzan 1 to Ramzan 1), your unused balance is $1,000. You pay zakat on that balance.
For year 2, your unused balance is $2,000. You pay zakat on that balance.

I don’t see any additional $500 in the example. You close your year at Ramzan 1st and compute zakat. Not take intervening periods (e.g. Months 3 to 17 etc) and come out with new balances all the time.

Secondly, what I do is compute the zakat on Ramzan 1st, and put the amount in a separate account. I don’t have to give all of it away on day one. I try to give it away as quickly as possible, but still look for best sources of utilization. Technically you can keep giving out the zakat money throughout the year to deserved people and causes. However, that doesn’t change the fact, that the annual computation of zakat due is made on Ramzan 1st.

in the example tht i gave, from month 3 to month 17 (assume them Islamic months) there has been 6000$ in the account, out of which zakat has been paid on only 1000$ (in month 0) and the rest 5000$ had completed one year unused with the person in the month 15 which was never accounted for…
instead when he spends 4000$ in month 17, when the money had been with him for well over a year, he is left with 2000 off which he pays zakat in month 24…

THAT IS WRONG…

now had he followed the method of paying off zakat on all the balance he had in his account every year, he wud have paid off the zakat on 6000$ in month 12, instead of only on 1000$…
then when he went to month 24 with only 2000$, he need not worry about the 5000$ that spent 14 months in his account untouched, cuz he has already paid off the zakat in advance…

[Faisal]

Re: Zakat Question

^ You have to follow Islamic calendar. You can not take rolling 12 months at any given time. Ofcourse, you can personally give as much zakat as you want to, but that will be incorrect advice to anyone asking about this. In your example, the basic assumption is that month 1 is Ramzaan. You calculate the unused wealth from Ramzaan 1 to Ramzaan 1. Not for any random months. Then again, if you want to give out more, thats fine.

[armughal]

Re: Zakat Question

zakat is not obligatory to be given in ramadhan....
it can be given off at any time of the year....
and what exactly is it in my examlpe that makes u think that the months r not Islamic months????

and if u think that Islamic year starts off with Ramadhan or that Zakat MUST be paid ni ramadhan than i think u have other things to learn before u can start thinking about zakat....

[yourfriend]

Re: Zakat Question

@Anwaar Qureshi

^
having said that, one condition is that the person remains eligible to pay zakaah during the beggining and end of the year. In that case, the easiest way is to pay zakah on the amount currently present at the end of one year.

what if u r out to balance at the end of your calculated yr..? .. that means u r not suppose to pay zakat ?

i earn pretty much fair amount but spends right away and usually ends up with very little balance .. so that means i am suppose to pay zakat on just that left over bucks?

sorry, i am totally confused

[Captain1]

Re: Zakat Question

@armughal

zakat is not obligatory to be given in ramadhan…
it can be given off at any time of the year…
and what exactly is it in my examlpe that makes u think that the months r not Islamic months???

and if u think that Islamic year starts off with Ramadhan or that Zakat MUST be paid ni ramadhan than i think u have other things to learn before u can start thinking about zakat…

It doesn’t really matter what month you pick for calculating Zakat, you have to stick to that month to calculate zakat every year… Ramzan is said to give you “multiple” of sawab compared to other months, so people usually pick Ramzan as start of fiscal year (for calculating zakat).

[Sadiyah]

Re: Zakat Question

Since some have become confused, I thought I’d post the following fatawa in attempt to hopefully dispel the confusions, insha’Allah.

You do not pay Zakâh from your wages. You pay it from your monetary savings (gold, silver, and currency) that you have retained in your possession for one full year. You must calculate the amount of money that you have had in your possession for one full year. Then, if you find that it reaches the minimum amount of money for which Zakâh is required, you must take from it 1/40th (2.5%) and give it to the poor, the destitute and others like them.

The minimum amount of savings for which Zakâh is due is the monetary value of 595 grams of pure silver. You should determine the exact value in your currency before paying. If your savings that you have retained for a full year are less than this amount, you do not have to pay Zakâh.

You pay Zakâh on livestock, certain types of produce, trade merchandise, and properties that are used to generate income (like rental properties). You do not pay Zakâh on personal property like your home, car, or clothing.

And Allah knows best.

http://www.islamtoday.com/show_detail_section.cfm?q_id=598&main_cat_id=36

Question: Upon which forms of wealth is Zakâh due?

Answered by Sheikh al-Sharîf Hamzah al-Fa`r, professor at Umm al-Qurâ University

Zakâh is obligated on livestock (camels, cattle, and sheep), certain land produce, currencies (gold, silver, monetary instruments) and commercial inventory.

The Prophet (peace be upon him) said that on the Day of Resurrection: “…camels will come to their owner in the best state of health they have ever had (in the world), and if he had not paid their Zakâh (in the world) then they would tread him with their feet; and similarly, sheep will come to their owner in the best state of health they have ever had in the world, and if he had not paid their Zakâh, then they would tread him with their hooves and would butt him with their horns.” [Sahîh al-Bukhârî]

The Prophet (peace be upon him) said: “In what is supported by rainwater or spring water or irrigated without human effort, then 1/10 of the produce is due upon it. That which must be irrigated has 1/20 of the produce levied upon it.” [Sahîh al-Bukhârî]

With respect to money, the Muslim is requested to give Zakât ( Charity) if the amount he possesses reaches the amount assigned by Islamic law (nisâb), which is 85 grams of pure gold (24 carats), or 595 grams of pure silver, or the equivalent in gold, silver, or other monies.

It was related by `Alî that the Prophet (peace be upon him) said: “If you have 200 dirham and a year passes then you have to pay five dirhams. You do not have to pay anything for the gold you possess until it reaches twenty dinars. If you possess twenty dinars and a year passes, then you have to pay half a dinar.” [Sunan Abî Dâwûd and authenticated by al-Albânî in Sahîh al-Sunan]

When the amount you are keeping reaches the nisâb, you still do not have to pay Zakâh for it unless it remains under your possession for one full year starting from the date of acquisition, provided you have no debt that equals or surpasses the amount or brings it below the nisâb.

The Zakâh to be paid on this wealth is 2.5% annually.

http://www.islamtoday.com/show_detail_section.cfm?q_id=597&main_cat_id=36

It is obligatory on the woman who possesses money to pay her own Zakâh. She must know that in Islamic Law, she is the one responsible for managing her own personal finances. If the money in her possession is enough to make her liable to pay Zakâh, then she must pay it.

For money, she is liable to pay 2.5%. If she possesses $10,000, for instance, she is liable to pay $250.

Her husband’s finances have nothing to do with her’s, so his debt has no affect on her Zakâh.

http://www.islamtoday.com/show_detail_section.cfm?q_id=599&main_cat_id=36

Remainder (fatawa) can be viewed at: Payment of Zakâh

[Sadiyah]

Re: Zakat Question

I just came across the following article that refutes those who assume that Zakah is only to be paid only once on wealth rather than paying for it every year.

Please visit the following link for details: Zakâh Must Be Paid on the Same Wealth Year After Year

[yourfriend]

Re: Zakat Question

emm.. zakat is due on credit lines too??