What is Zakat
Zakat is the third pillar of Islam. It requires every sane, adult Muslim whose wealth exceeds the current nisab value must pay Zakat, which is 2.5% of the individual’s total wealth.
Nisab is the minimum value of total wealth one must possess in order to pay Zakat. It is defined as the value of 87.5g of pure gold or 613g of silver. Most scholars favour the lower value as it means that more people can pay Zakat and therefore there are more beneficiaries.
The value of 613g of silver as of 18 February 2021=£392 (GBP)
Zakat is both a spiritual duty and a vital part of the Islamic social welfare system. Zakat is more than just a payment or a random act of charity. It’s a unique form of religious social welfare which benefits the whole community.
Every person who is sane, an adult (reached puberty), Muslim and sahib-un-nisab must pay Zakat as a duty. To be a sahib-un-nisab means you possess more wealth than the level of nisab for a period of one lunar year or more.
- Gold and silver, including ornaments or jewellery containing gold and/or silver
- Cash held at home or in bank accounts
- Stocks and shares owned either directly or through investment funds-Money lent to others
- Business stock intrade and merchandise
- Agricultural produce
- Livestock animals such as cows, buffalo, goats, sheep and camels
- Produce of mines
- Pensions-Property owned for investment purposes
You can pay Zakat at any time of year, but many people choose to do so during the holymonth of Ramadan when the reward for our good deeds is multiplied. This is amplifiedfurther during Laylatul Qadr, the Night of Power, when good deeds are amplified in value bya thousand times. Also, manypeople give Zakat during Ramadan each year because it’s easyto track the progress and end of the lunar year, ensuring that no Zakat payments aremissed.
There are eight categories as outlined in the Qur’an: The poor, those indebt, thewayfarer, those in the cause of Allah (SWT), the needy, those whose hearts are to bereconciled, to free those in captivity and those who collect and distribute Zakat payments.