Prerequisites of obligation of zakāt

Zakāt is obligatory upon free and competent adults who are in possession of their faculty of reasoning.

He should own more than a specified amount, called nisāb, of growing wealth in excess of his essential needs and debts. Essential necessities are the things that a person needs to maintain his life and liberty. Among them are his house, all the items in his house except gold and silver ones, his clothes, living expenses of household members for a month – according to another view for a year – his books for personal study, and his handicraft tools for work.

 “Nisāb” means the minimum assigned amount for the requirement of zakāt. The amount of nisāb differs depending on the assets.

Another condition for zakātability is that the zakātable assets must have the quality of namā or wealth must either be actually growing or have the potential for growth. According to terminology of tax law, this is stated as follows: “wealth must either grow itself or bring profit and benefit to its owner.” “Actual growth” occurs as a result of birth, procreation, trade etc. “Potentially growing wealth” on the other hand means that the type of wealth in hand has potential to grow.

Twelve full lunar months should pass from the beginning of ownership of the assets. Zakāt has to be paid according to lunar year, in other words for every 354 days % 2.5 of the wealth is given as zakāt. However nowadays some companies calculate their zakāt according to solar year or 365 days, which means they need to calculate and add 11 more days of zakāt to their payments. It should also be mentioned that “this condition is restricted to livestock, money, and business assets. It does not apply to crops, fruits, honey, extracted minerals, found treasure, etc., where there is no condition of one year on the grounds that zakāt on those items is a sort of zakāt on income.”[1]

Owner of the assets must have the undivided and absolute right of the ownership.

Those who will pay their zakāt must be very meticulous about tamlik and taharri, because the validity of zakat depends on them. As it is mentioned before tamlik means to give or to transfer ownership of the alms, in other words recipient must get the complete ownership of it. Taharri,on the other hand, means the investigation before giving zakat. That is to investigate whether the receiver of zakat is eligible for it or not. If zakat is given to someone not qualified, and later it appears that the receiver is not one of the eight eligible categories mentioned in the Qur’an, zakat becomes invalid and it needs to be repaid. However if an investigation was performed before the distribution of zakat, but later it arises that the receiver was not eligible, then there is no need to repay zakat.

Another central principle about zakat is not to forget family member and relatives. Human beings first of all have rights upon themselves, next comes the rights of the family members and then rights of the relatives. Same order of the rights is also observed in inheritance law. Priority in the order of the rights depends on two things: First is the strength and closeness of the relation and the second is the degree of deprivation and necessity.

Preferring relatives over others does not mean giving zakat to a relative when there is someone who has more urgent needs. Preference is given to relatives only if the necessity levels are same. Degree of necessity should always be taken into consideration. If a stranger has more needs, then preference cannot be given to relatives.

All these measure and conducts are manifestations of how Islam, on the one hand, promotes mercy and, on the other hand, observes the balance. Because the first fruit of faith is mercy, those who do not have mercy in their hearts cannot be considered as real believers. Basmala, which is stated as the begin ning of all goodness, and Fatiha, first chapter of the Qur’an, start with the Allah the Almighty’s attributes of Rahman (Most Gracious) and Rahim (Most Merciful). Lives of the prophets and the lives of friends of Allah the Almighty are full with manifestations of mercy. The Prophet’s (pbuh) saying: “Show mercy to those on earth, so that those above the heaven will show mercy to you” points out that Muslim’s mercy should encompass entire creation. Socio-financial worships, such as zakat, infaq and ushr, are all expressions of compassion.

Types and limits of wealth subject to zakāt

The minimum zakātability limit for sheep and goats is 40, for cows 30 and for camels 5. Minimum limit for gold is 81 grams,[2] and for silver 561 grams. While there is a standard amount to be paid which is 1/40 for gold and silver exceeding the minimum zakātability limits, the amount needs to be paid for the rest of the zakātable assets differs. When the number of animals changes, the amount required to be paid changes. Detailed information can be found in books explaining the principles of Islam. Also the required limits for mines and seafood can be found in those books.

All movable and immovable assets yielding profits are subject to requirement of zakāt. Zakāt for the revenues of rented assetsneeds to be calculated after deducting, debts, personal and family expenses and costs such as wages, maintenance, taxes, among others. Lands bought for trading purposes are subject to zakāt based on their initial price (if there is any, the difference of inflation needs to be added to the calculation). Buildings built to sell are, on the other hand, subject to zakāt based on their values after deducting the costs.

Calculation of zakāt for business inventory is done as follows, if is paid by the company not by the shareholders. First revenues and expenditures need to be calculated either at the beginning of the year or at the end of it. After adding receivable debts and credits to net income, either % 2.5, if it is calculated based on the basis of lunar year, or %2.6 of the net income, if it is calculated on the basis of solar year, must be paid as zakāt. It should be mentioned that zakāt for business income is levied not just on profits but also on the principal of the company.

Industrial establishments such as factories, workshops, plants, etc. calculate their zakāt as follows:

There no zakāt for machinery and tools.  However if they are made from gold or silver, then their values should be calculated for zakāt.

Business principal is subject to zakāt. After deducting expenses and costs, zakāt is calculated for the rest of the principal.

If the wages of the workers are paid monthly, fluctuations during the year are not taken into consideration. Only the balance at the end of the year is important for zakāt calculations.

If zakāt is paid in cash, then it is very important to calculate the effects of inflation.  In order to protect the rights of the poor and to be able to make a more accurate calculation, it is necessary to establish a fixed method of zakāt calculation. Otherwise the real value of the paid amount will be less than 2.5 percent. The needy will be suffered, and the obligation of zakāt will not be performed properly.

Islam essentially ordered zakāt to be paid in kind. In other words zakāt is recommended to be paid in gold for those who have gold, in silver for those who have silver, by sheep for those who have sheep, by wheat for those who have wheat and by cloth for those who own cloth. However zakāt was collected either in kind or in cash during the time of the Prophet (pbuh), then during the period of Abu Bakr and Omar (may Allah be pleased with them).  That is why there is no problem today with paying zakāt in cash.

Recipients of zakāt

Allah the Almighty says:

“Alms are only for the poor and the needy, and the officials(appointed) over them, and those whose hearts are made to incline (to truth) and the (ransoming of) captives and those in debts and in the way of Allah and the wayfarer; an ordinance from Allah; and Allah is knowing, Wise.”(9; 60)

This verse clearly reveals the eligible recipients of zakāt, which are:

The poor: Those who have wealth less than the minimum zakātable amount or nisāb. People in this group can get zakāt, even if they have a regular job.

The needy: Those who are extremely poor and do not even own their daily sustenance.

Workers in zakāt administration

Those whose hearts are being reconciled

Slaves: Slaves who have signed a contract with their owner for their emancipation

Those under liabilities: zakāt can be paid to those who have more debt than their wealth.

In the way of Allah: those who fight in the way of Allah, those who set out for pilgrimage and are stranded on their way without money, those who study and teach in order to be beneficial to humanity and Muslim nation.

Wayfarers: zakāt can be paid to travelers who are stranded on their way without money, even if they are wealthy in their hometown.

Categories to which zakāt cannot be given

Zakāt cannot be given to mothers, fathers, grandmothers, grandfathers, sons, daughters, the rich and non-Muslims. Also spouses cannot give their zakāt to each other.

Zakāt can only be given to individuals for their essential necessities. It cannot be given to corporate entities. That is why mosques, schools and hospitals cannot be built by zakāt revenues. Feasts for the needy cannot be considered zakāt, because there is no transfer of ownership.

‘Ushr (Tithe): Zakāt on Agricultural Produces

According to Abu Hanifa (may Allah have mercy on his soul) there is no nisāb limit for agricultural produces. In other words, neither a zakātability limit nor a passage of a year requirement is sought for agricultural produces. According to Abu Yusuf and Muhammad Shaybani the minimum limit for agricultural produces is 653 kilograms.

If a produce is harvested more than once a year, ‘ushr needs to be paid for each harvest based on the type of the produce.

Unlike zakāt, ‘ushr (tithe) has to be paid from produce of the lands of children and insane. It should also be paid from the heritage of a deceased.

Agricultural produce has to be preservable for a year. That is why there is no ‘ushr for fresh fruit and vegetables, for they are perishable products.

For agricultural produce watered without a cost, for instance by rain, river or lake water, one tenth of the produce is paid as ‘ushr. If watering the crops requires some additional costs for more than half of the year, then the amount needs to be paid drops to one twentieth. However once the rate decreases to one twentieth other costs, such as seeds, labor, pest control, etc. cannot be deducted.

Once ‘ushr is paid for the produce, such as olive, sesame, and sunflowers seeds, there is no requirement to pay it again for their oils. However the person who buys the oil for trading purposes must pay zakāt for trade income.

Payment of ‘ushr based on a pre-harvest estimation is not allowed.

If the owner needs to consume his agricultural produce before the payment of ‘ushr, he should compensate ‘ushr for the consumed part. For instance if someone uses 10 kilogram of the produce, he needs to pay an additional kilogram ‘ushr.

Lands which are conquered by Muslim armies but not distributed among the Muslims are called miri lands. Ownership of those lands belongs to the Muslim state, but their utilization rights are given to peasants. Peasants are like tenants and the taxes and levies they pay are similar to rents. From this type of lands there is no ‘ushr or any other type of zakāt. During the Ottoman Empire, lands were usually under this category.

Later vast areas of miri lands in Anatolia and Rumelia were sold to individuals in exchange of land titles. In this way a new type of land emerged called mulki lands. This type of land should be subjected to ‘ushr, because they can be bought and sold. If ‘ushr is not collected by the state, then Muslims must calculate and distribute it personally.

[1].      Qaradawi, Yusuf, Fiqh al-Zakah: A Comparative Study of Zakah, Regulations and Philosophy in the Light of Qur’an and Sunnah, Trans. by Monzer Kahf, Scientific Publishing Center King Abdulaziz University, Jeddah, Online edition, vol. 1, p. 71

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[2].      There are different calculations for gold. According to them minimum zakātability limit is calculated as 96, 90, 85 and 81 grams. Here we have accepted 81 grams for the benefit of the poor.