Today, I return to an important subject, which
is Zakaat, the third pillar of Islam. I have noticed that despite
the explanations provided about Zakaat, this subject remains unclear to many of
you. Hence, I come once again on this subject and request all my disciples to
refer to my past sermons, as well as what I am going to say to you today.
Compile this into a small booklet and distribute it to everyone so that you
have a reference regarding Zakaat and can clearly understand how you need to
calculate Zakaat and upon what assets you need to apply it.
First of all: What is Zakaat? It is a tax that Allah has made obligatory for all adult Muslims (who have reached puberty) and who possess the minimum sum upon which Zakaat is mandatory, referred to as “Nisaab.” This tax purifies the wealth of believers, not only bringing more Barakat (blessings) to their worldly and spiritual possessions but also serving as an essential means for Islam to gather sufficient funds and resources to help its progression globally. Additionally, it strengthens and enriches the poor, alleviates their suffering from poverty, and offers them a new chance to rebuild their lives – to give them a fresh start in life. Therefore, it is called the Purification Tax (a purifying tax) because sharing it with the less fortunate encourages kindness, generosity, and a balance of wealth within society, redistributing wealth to prevent the rich from becoming too rich and the poor from becoming too poor.
Thus, Zakaat, the Purification Tax, is a fundamental pillar of Islam that helps purify a person’s wealth and soul while simultaneously promoting equality and social justice. In Arabic, “Zakaat” means purification, increase, and blessing. The Holy Quran gives utmost importance to it, emphasizing it in several instances, where Salaat (prayers) is mentioned alongside Zakaat – highlighting its significance. In one of its verses, Allah says: “Take Sadaqa from their wealth. Through it, you will cleanse their sins and purify them…” (At-Tauba, 9:103).
In general, the term “Sadaqa,” derived
from the word “Sidq” (truth or honesty), means “veracity” and “sincerity.”
Within the financial context of Islam, it refers to all acts of charity that
Muslim believers voluntarily give with generosity and sincerity to assist the
less fortunate among them (among Muslims themselves). However, Zakaat
represents a form of Sadaqa that is not voluntary but has been specified
by Allah as obligatory.
In the Quran, Allah states: “Observe Salaat (prayer) and give Zakaat (tax to purify
yourselves). Any good deeds you do for yourselves in advance, you will find
them with Allah. Allah sees all that you do.” (Al-Baqara, 2:111)
Within the broader context of Sadaqa and Zakaat,
Allah mentions Sadaqat, which includes Zakaat. In Surah At-Tauba
Verse 9, He [Allah] provides instructions on how to distribute Zakaat and
specifies who deserves to receive it. The verse states:
“The Sadaqat are indeed for the
destitute, the poor, those employed in the organization of these funds, those whose
hearts are inclined towards Islam, for freeing slaves, for those in debt, for
all endeavours in the path of Allah, and for travellers (in distress). This is
Allah’s order. Allah is knowledgeable and Wise.”
Now, let’s turn specifically to the subject of “Nisaab,”
how to distribute Zakaat, and which possessions of a person are subject to Zakaat.
“Nisaab”
simply means a minimum amount. A person must possess this minimum amount for Zakaat
to apply to them. According to the teachings of our beloved Prophet Hazrat
Muhammad (pbuh), Nisaab is defined as 200 silver dirhams or 20 mithqals
of gold, which approximately equates to: 85 to 87.48 grams of gold or 595 to
612.36 grams of silver.
You will find in my past sermons that I have
mentioned these two figures. It is recommended for believers to pay more Zakaat
rather than just the minimum or even risk paying less without realizing it.
Hence, if the Nisab is calculated based on 85 to 87.48 grams of gold or 595 to
612.36 grams of silver, it is not sinful; however, it is preferable to pay more
than less. As mentioned in the verse from Surah Al-Baqara Verse 111, Allah
says: “Any good deeds you do for yourselves in
advance, you will find them with Allah.” Therefore, anything you give
in the path of Allah for His pleasure will bring growth and blessings as a
reward from Allah.
Now, let us focus on how to calculate Zakaat
and which possessions of a person are taxable under Zakaat, considering they
meet the minimum amount (Nisaab). Keep in mind this Hadith, which I have
already shared with you in the past. Hazrat Muhammad (pbuh) said: “There
is no Zakaat on 190 dirhams, but give FIVE dirhams on 200 dirhams.”
(Tirmidhi).
Here, we observe how Zakaat is applied at 2.5%
of Nisaab. When Hazrat Muhammad (pbuh) provided this instruction, it was based
on 200 dirhams, which approximately equates to 595 to 612.36 grams of silver.
Therefore, if a person possesses less than 595 grams of silver or its
equivalent in the current monetary value of our present society [country to
country or international value], they are not required to pay Zakaat. Zakaat is
not obligatory for them, but if they voluntarily wish to contribute a small
portion of what they own to the Zakaat fund, they are welcome to do so.
However, note carefully that when Hazrat
Muhammad (pbuh) made his calculation, if a person possesses Nisaab (200
dirhams), then 2.5% is applied to the entire 200 dirhams.
Now, I present a fictional example of values
here for you to use as an example to better help in understanding how to
properly calculate Zakaat.
If the Nisaab is Rs.1000, and a person
possesses Rs.900, or even Rs.999.99, Zakaat is not obligatory for them.
However, if they possess Rs.10,000, which is taxable under Zakaat, they must calculate
2.5% on the entire Rs.10,000. They cannot say, “Oh, Nisab is Rs.1000, so I’ll
deduct Rs.1000 from Rs.10,000; I only need to pay 2.5% Zakaat on Rs.9000.”
No! They must calculate Zakaat on the entire Rs.10,000.
One more thing to bear in mind: This minimum
amount (Nisaab) is not fixed and may change each year as it depends on
the current value of gold and silver in the gold and silver markets. I
encourage Muslims to check local prices – in their countries – to calculate Nisaab
based on its modern equivalent in currency (such as rupees, dollars, pounds
sterling, euros, modern dirhams, etc.).
Now let us examine the wealth of
a person that is taxable by Zakaat (if they meet Nisaab):
1. Gold and Silver – This
includes: all forms of gold and silver, including jewellery, coins, and gold or
silver bars.
Although some Muslim scholars exempt personal
jewellery that is worn regularly (especially by women), as the Khalifatullah, I
believe that all gold and silver should be included in Zakaat. Keep in mind
this Hadith where a woman came to the Prophet (pbuh) accompanied by her
daughter. The daughter was wearing two thick gold bracelets (on her arms). The
Prophet (pbuh) asked her, “Do you give Zakaat for these bracelets?” She
replied, “No.” He (pbuh) then said, “Do you wish for Allah to make
you wear two bracelets of fire on the Day of Judgement?” She then removed
them and gave them to the Prophet (pbuh), saying, “This is for Allah and His
Messenger.” (Abu Dawud, Tirmidhi)
If a person is engaged in trade involving gold
and silver, then it is compulsory for them to pay Zakaat on these assets.
How is Zakaat calculated (for
gold and silver)? Assess the total weight of
the gold and silver. If it reaches Nisaab, calculate 2.5% of the current
value of this gold and silver (if it exceeds Nisaab). Include everything
in this calculation, including the Nisaab itself.
2. Cash and savings in the bank
– This includes: cash, funds in bank accounts, fixed deposits, and other
similar liquid assets.
Remember that Zakaat applies to savings – those
kept in the bank for a lunar year – as long as they reach Nisaab, after
deducting debts and necessary daily expenses.
How to calculate Zakaat (for
liquid assets such as money): Add up all your cash in
the bank – whether in one bank or multiple banks where you hold accounts – deduct
all your debts, and calculate 2.5% on the remaining amount.
3. Business, Agriculture, Livestock Farming and
Rent – Keep in mind that if a person is engaged in
business, whether in agriculture or livestock farming, Zakaat is applicable to
these as well. There is no Zakaat applicable to precious stones or other
gemstones that adorn jewellery, unless you are trading and selling these
precious stones and other valuable jewellery ornaments. In a business context,
you must then pay Zakaat on these gemstones.
If a person is living in rented accommodation,
there is no Zakaat on the rent they pay. However, if they are a property owner
renting out their buildings or apartments to others, they are required to pay Zakaat
on the total value of their rental income for the lunar year, provided it
exceeds Nisaab. Some scholars exclude rental income from Zakaat, but as
the Khalifatullah of this era, I emphasise paying Zakaat on your monthly rental
income for the lunar year. Keep in mind that this is better for you in the eyes
of Allah. It is not only when you have saved the rental income in the bank for
a year that you give Zakaat, but you calculate all rental income you have
earned from your tenants and pay 2.5% Zakaat on the total for the year. Purify
your money in this way. Allah is pleased when you give more rather than less.
The more you give, the more Allah will bless your wealth in return, Insha-Allah.
Therefore, remember my disciples and other
Muslim brothers and sisters, if you are in doubt regarding the payment of Zakaat,
if something is unclear in your mind, then it is better for you to calculate
and give Zakaat more rather than less. Giving more will bring you greater
rewards from Allah. Indeed, Allah is pleased with those who spend abundantly in
His way. May Allah accept your payment of Zakaat, as well as your Salaat, and
help you to do more good in the world and reap abundant rewards. Insha-Allah,
Ameen.
---Friday Sermon of 14 March 2025~ 13 Ramadan 1446 AH delivered by Imam- Jamaat Ul Sahih Al Islam International Hazrat Muhyiuddin Al Khalifatullah Munir Ahmad Azim (aba) of Mauritius.