Zakat Simplified

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Simplifies the concept of Zakat (Islamic Obligatory Charity) as per Hanafi Fiqh. Part of 'Zakat Simplified' workshop held at Kolkata, India, in June 2014. For more information please visit www.zakatonline.in

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Kala Mandir, Kolkata Sunday, 22 June 2014

22/06/14 Zakat Simplified Workshop

Quiz : True or False 1.  Zakat is due every year i.e. if I pay it on 1

January 2014, it will next become due on 1 January 2015

2.  Zakat rate is one-fortieth (i.e. 2.5%) of the value uniformly for all items

3.  A husband can give Zakat to a wife, but a wife cannot give Zakat to her husband

4.  If I have 2 (self-occupied) houses, the extra house is covered under Zakat

22/06/14 Zakat Simplified Workshop

Quiz : True or False 5.  Agricultural land is covered under Zakat 6.  Factories are covered under Zakat 7.  Non-essential items like TV, computer, car

etc. are covered under Zakat 8.  The Niyah of Zakat has to be made at the

time of giving Zakat 9.  Zakat can be given to organisations 10. A person not liable to pay Zakat, can accept

Zakat

22/06/14 Zakat Simplified Workshop

Answers to Quiz Questions at end of workshop!

22/06/14 Zakat Simplified Workshop

Today’s objectives

•  Basics of Zakat •  Who is required to pay Zakat? •  Which are Zakatable Assets? •  How are Zakatable Assets valued? •  Who can we pay Zakat to? •  Intro to www.zakatonline.in

22/06/14 Zakat Simplified Workshop

BASICS OF ZAKAT

22/06/14 Zakat Simplified Workshop

The Wisdom of Zakat

•  Growth •  Purity •  Balances Inequity •  Direct Benefit Transfer •  Brotherhood •  Reduces Greed •  Best investment

22/06/14 Zakat Simplified Workshop

Annual Income

Annual Saving

Wealth / Assets

CONCEPTUAL CLARITY OF ZAKAT

Minus: Expenses

22/06/14 Zakat Simplified Workshop

Zakat-able

Assets

Zakat-able

Assets

CONCEPTUAL CLARITY OF ZAKAT

NISAAB

CHECK…

22/06/14 Zakat Simplified Workshop

Zakat-able

Assets

Zakat 2.5%

CONCEPTUAL CLARITY OF ZAKAT

NISAAB

CHECK…

If Yes

22/06/14 Zakat Simplified Workshop

Some Basics

•  Zakat = (Minimum) Obligatory Charity •  To be Paid Annually (lunar year) •  On select items of Wealth •  Valuation as per market price •  To be given only to specified people •  Err on the side of safety

22/06/14 Zakat Simplified Workshop

ZAKATABLE ASSETS

22/06/14 Zakat Simplified Workshop

Zakatable Assets

22/06/14 Zakat Simplified Workshop

Gold & Silver Cash & Equivalent Trade Stock

Livestock Agriculture Produce Buried Treasure / Mines

Livestock •  Only on some animals •  Should be mostly Self

Grazing •  Nisaab –  Camel – 5 –  Cow – 30 –  Goat / Sheep – 40

•  Rates of Zakat –  Step based

22/06/14 Zakat Simplified Workshop

Agriculture Production (Ushr) •  No Nisaab •  Not necessary to

Complete one year •  Payable immediately

on harvest •  Rates –  10% if rainfed –  5% if irrigated

22/06/14 Zakat Simplified Workshop

Mines / Buried Treasures •  No Nisaab •  No completion of year •  Payable immediately

on extraction •  Mines (Gold, Silver,

Brass, Bronze, Iron etc) –  20%

•  Buried Treasures –  20%

22/06/14 Zakat Simplified Workshop

Zakat on Gold & Silver

22/06/14 Zakat Simplified Workshop

Zakat on Gold & Silver •  Payable on all Gold & Silver (in use, not in

use, decorative etc.) •  Deduct value of any stones etc. from jewellery •  Value will be as on date of Valuation, in place

where asset is •  In case trader in Gold & Silver, Zakatable but

as ‘Trading Stock’ – no double zakat •  No Zakat on diamonds, pearls, precious

stones, platinum, Rubies etc.

22/06/14 Zakat Simplified Workshop

Zakat on Gold & Silver •  Take Value of 24 carat Gold (per gram) – Value of 22 carat gold is 22/24 of 24 carat value – Value of 18 carat gold is 18/24 of 24 carat value –  Ignore workmanship, design costs etc.

•  Silver take rate per Kg (as available in market) – Apply to all silver assets –  Ignore other costs

22/06/14 Zakat Simplified Workshop

Zakat on Cash & Equivalents

22/06/14 Zakat Simplified Workshop

Zakat on Cash & Equivalents •  This is all liquid wealth which is in cash form

or can be converted to cash at short notice •  In Bank balances, deduct interest since Zakat

is not payable on impermissible income •  Similarly in any investment, if there is any

component of Interest, deduct it •  Loans taken (non-business) should be set-off

from these – Business loans we will set off from trading stock

22/06/14 Zakat Simplified Workshop

Zakat on Trade Stock

22/06/14 Zakat Simplified Workshop

Zakat on Trade Stock

•  Covers ANY item •  Depends on Niyah when purchased •  Only on production / trading stock – Damaged Goods – Obsolete / Dead Stock

•  Value as per market rate (not cost price) •  Tools of trade are not covered •  Shops / offices / factories not covered 22/06/14 Zakat Simplified Workshop

Zakat on Trade Stock

•  Debtors & Creditors need to be adjusted – Doubtful Debts – Bad Debts

•  Loans taken / given for business also •  Zakat on Partnership Business /

Companies

22/06/14 Zakat Simplified Workshop

DEMONSTRATION

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My factory

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My showroom

22/06/14 Zakat Simplified Workshop

My Home

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My second home

22/06/14 Zakat Simplified Workshop

My home items

22/06/14 Zakat Simplified Workshop

ELIGIBILITY FOR PAYING ZAKAT

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Conditions for Zakat

•  Muslim, Baligh, Aqil •  Owner & Possessor of the Property •  Completion of one year (Haul)

22/06/14 Zakat Simplified Workshop

Sahib-e-Nisaab

•  Gold – 87.48 grams •  Silver – 612.32 grams •  Or Cash or Trade Stock equivalent Nisaab Today (June 2014): Rs. 26,000 approx Haul – as per Lunar Calendar

22/06/14 Zakat Simplified Workshop

Sahib e Nisaab

22/06/14 Zakat Simplified Workshop

If

Is More Than Rs. 26,000

Then Pay Zakaat @ 2.5% of TOTAL VALUE (not minus Nisaab)

Haul

22/06/14 Zakat Simplified Workshop

Lunar Month 1 2 3 4 5 6 7 8 9 10 11 12

Net

Zak

atab

le

Asse

ts

Nisaab

Zakat Payable

on*

(* as per Hanafi Fiqh)

Haul

22/06/14 Zakat Simplified Workshop

Lunar Month 1 2 3 4 5 6 7 8 9 10 11 12

Net

Zak

atab

le

Asse

ts

Nisaab

Zakat Payable

on*

(* as per Hanafi Fiqh)

Haul

22/06/14 Zakat Simplified Workshop

Lunar Month 1 2 3 4 5 6 7 8 9 10 11 12

Net

Zak

atab

le

Asse

ts

Nisaab

Zakat Payable

on*

(* as per Hanafi Fiqh)

Haul

22/06/14 Zakat Simplified Workshop

Lunar Month 1 2 3 4 5 6 7 8 9 10 11 12

Net

Zak

atab

le

Asse

ts

Nisaab

Zakat Payable

on*

(* as per Hanafi Fiqh)

ZAKAT VALUATION / CALCULATION

22/06/14 Zakat Simplified Workshop

22/06/14 Zakat Simplified Workshop

22/06/14 Zakat Simplified Workshop

22/06/14 Zakat Simplified Workshop

22/06/14 Zakat Simplified Workshop

22/06/14 Zakat Simplified Workshop

WHO CAN WE PAY ZAKAT TO?

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Wealth / Assets

Non- Essential

Assets

WHO CAN RECEIVE ZAKAT?

Zakatable

Assets

22/06/14 Zakat Simplified Workshop

Non- Essential

Assets

WHO CAN RECEIVE ZAKAT?

Zakatable

Assets NISAAB

How to Verify: Taharri

22/06/14 Zakat Simplified Workshop

Eligible recipients for Zakat 1.   Faqeer: poor; one who has some money, but not

sufficient for his basic needs 2.   Miskeen: destitute; one who has nothing 3.   Amileen: zakat collector, appointed by the

Caliph 4.   Mu'allafah Qulubuhum : to soften the hearts 5.   Riqaab: to slaves to purchase their freedom 6.   Gharim : one in debt for a legitimate reason 7.   Fi Sabeelillah: in the path of Allah 8.   Ibnis-Sabeel: wayfarer; one stranded away from

home, with no money available to him

22/06/14 Zakat Simplified Workshop

People who cannot be given Zakat

•  Non-Muslims   •  Well-off people •  Relations of birth – upward and downward •  Relations of marriage •  Employer or Labourer, as wages •  Children of the family of Bani Hashim – Prophet Muhammad’s family, Hazrat Ali’s family

etc •  An organisation / institution (except as agent)

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Zakat Payment

•  Neeyah •  Make complete owner •  Not as compensation for work done •  Not only in Ramadan •  Giving Zakat in non-cash form – medicines / clothes / food

22/06/14 Zakat Simplified Workshop

Zakat Etiquettes •  Seek out the deserving •  To permitted relatives first •  Give with humility •  Pay in secret, preferably •  Need not mention its Zakat •  Don’t ruin by reminder and

injury •  Need not explicitly mention it

is Zakat

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Zakat Neeyah

•  At time of segregation Direct Payment •  At time of payment to recipient •  After payment until it is with recipient Payment Through Agent •  At time of payment to agent •  After payment until it is with agent

22/06/14 Zakat Simplified Workshop

WWW.ZAKATONLINE.IN

22/06/14 Zakat Simplified Workshop

Why www.zakatonline.in

•  Online site with Zakat information •  Eases Calculation •  Advanced Calculation features •  Allow e-payment •  Partnership with organisations •  Run Campaigns •  Umbrella for charitable causes

22/06/14 Zakat Simplified Workshop

22/06/14 Zakat Simplified Workshop

www.zakatonline.in

22/06/14 Zakat Simplified Workshop

www.zakatonline.in

Lets check: True or False 1.  Zakat is due every year i.e. if I pay it on 1 January

2014, it will next become due on 1 January 2015 –  False. Its due at end of lunar year, not solar year. Hence, every

355 days i.e. after 1 Jan 2014, it would become due around 21 Dec 2014.

2.  Zakat rate is one-fortieth (i.e. 2.5%) of the value uniformly for all items –  False. Although the general rate for standard items (like gold,

silver, jewellery, stock) is 2.5%, it is different for items like agricultural produce (5%-10%) and buried treasures (20%).

3.  A husband can give Zakat to a wife, but a wife cannot give Zakat to her husband –  False. Zakat cannot be given within relation of marriage

(Hanafi Fiqh)

22/06/14 Zakat Simplified Workshop

Lets check : True or False 4.  If I have 2 (self-occupied) houses, the extra house is

covered under Zakat –  False. Houses are not covered under Zakat, unless they are

bought with the intention of selling them. 5.  Agricultural land is covered under Zakat

–  False. There is no Zakat on any land, unless it is bought with the intention of selling.

6.  Factories are covered under Zakat –  False. Factories are not covered under Zakat.

7.  Non-essential items like TV, computer, car etc. are covered under Zakat –  False. There is no Zakat on these items.

22/06/14 Zakat Simplified Workshop

Lets check : True or False 8.  The Niyah of Zakat has to be made at the time of giving

Zakat –  False. Niyah can be made either at the time of segregation of

Zakat money, at the time of giving Zakah, or even after giving, until it is not used by the recipient.

9.  Zakat can be given to organisations –  False. Organisations are not covered under Zakat recipients.

They can be entrusted Zakat money only as agents to give it to eligible recipients.

10.  A person not liable to pay zakat, can accept Zakat –  False. For a person to be eligible to receive Zakat, not only his

‘Zakatable ‘assets should be below Nisaab but even after adding his ‘non-essential’ assets, it should be below Nisaab.

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Remain in Touch

•  Website: www.zakatonline.in •  Email: sirrisaqtiacademy@gmail.com •  sms TSSF ZAKAT <email address> to

07860005444

22/06/14 Zakat Simplified Workshop

Thank You

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