Essential Info
Zakat and Sadaqah
Introduction
Allah (swt) in His infinite Mercy has enjoined the giving of Sadaqah (charity) on His slaves, and with it He has bestowed enormous reward for those who give. The giving of Sadaqah is regarded as giving the Almighty a goodly loan, the repayment of which He alone will give (for only He can give a generous return like no one can) on the Day of Judgement. Having told us the benefits of giving Sadaqah, Allah (swt) has left it upon the individual to give as much as they wish – the reward is with Allah (swt).
However, Allah (swt) in His infinite Wisdom has made a very small portion of Sadaqah compulsory for us, and this is called Zakat. Non payment of Sadaqah deprives us of Allah’s mercy but non-payment of Zakat incurs Allah’s wrath. This is like abandoning any other obligatory (fard) requirement such as Salat, Saum and Hajj; if these are not performed Allah’s punishment will descend upon us. Like all obligations we have to pay Zakat according to the way shown by our beloved Prophet Muhammad (saw).
Below is MPR’s understanding of our obligations in discharging Zakat funds entrusted to us by you. We will give your Zakat money only to those who are eligible according to the Qur’an. MPR does not take interest from any source, not even from Banks. May Allah (swt) help us in meeting this challenge. Ameen.
Zakat
Zakat is one of the Five Pillars of Islam. It means purification and growth. It is a duty to Allah enjoined on every Muslim who has wealth in excess of their basic needs. By giving Zakat we are cleansing our baser characteristics like greed and selfishness and promoting sharing and caring values for those less fortunate than ourselves, building a better social structure and brotherhood. At the same time we are sending ahead for us good deeds which will help us in the Hereafter. Our wealth like everything we own is a trust from Allah and it belongs to Him. Even the guardians must pay on behalf of the orphans in their care. Giving Zakat is like the pruning of plants – it balances what we have and encourages new growth. The primary source of legislation in Islam is the Qur’an and its implementation was shown by the Prophet Muhammad (saw) by his example, i.e. the Sunnah.
Nisab
The minimum amount of wealth one must possess for Zakat to become obligatory is called nisab. So if all of his and his dependants’ basic needs are met, such as food, clothing, housing, transport and tools of the trade with all the debts paid then Zakat is due provided what remains reaches nisab or is above. It is usually paid at 2.5% of your total wealth provided you have acquired it for one whole Islamic (lunar) year since you started your calculation. If the value of your wealth fluctuates during the year you may use the lower figure to work out your Zakat at the end of the year. You will see from the wealth categories below the different nisab and Zakat values for each.
Zakat is due on the following categories of wealth:
1. Personal Wealth and Gold and Silver
This includes all currency and all types of savings after the deduction of personal expenses and debts. As with the recovery of bad debts, you must pay when collected.
To work out your nisab you should include gold and silver in all forms including jewellery. The nisab of gold should be used as the criteria in determining your Zakat contribution. Therefore all currency – savings, cash, etc. should be equated to the nisab of gold. Profits from a trade including from a hiring business, merchandise for trade i.e., stock from a shop, factory, warehouse or any other business are to be included in the calculations. Funds like retirement funds when they become available including grants, inheritance, mahr, salary, loans (as credited back to you) and market value of shares are also to be included. The simple way of working out your Zakat in this category is to value all your assets in currency and then deduct the value of nisab from this total remembering of course, nisab for silver is different.
Nisab is the equivalent of the value of 87.48 grams of pure gold or 612.69 grams of pure silver. The current price of gold and silver can be found at a number of websites e.g. https://online.kitco.com/sellprice/selling.html . Quotes are in troy ounce and the conversion rate is 31.1045 gram/oz. Prices can easily be converted into Sterling if the quotes are in $US.
2. Agricultural Produce
Staple crops and fruits: Wheat, barley, dates, corn and raisins. Nisab is equivalent to the value of 715 kg of wheat after deducting all expenses incurred in generating produce and debts.
Zakat due on land irrigated by nature such as rain water/river is 10% of the produce. The Zakat due on land irrigated by a well or artificial means requiring effort/additional cost to transport water, is 5% of the produce after each harvest.
3. Grazing Animals
Animals feeding freely from the earth: Sheep/goats, cattle and camels. The nisab of sheep/goats is forty, for cattle it is thirty and for camels it is five. Zakat due at the end of the year on 40-120 sheep/goats is 1 sheep, 30-39 cows/water buffaloes is 1 calf and for 5-9 camels is 1 sheep.
4. Minerals and Treasure
For minerals extracted from the earth without great effort or expense or buried treasure is found, there is a one off payment of 20% each time such an activity takes place. However if you are mining minerals for business then it is regarded as trade and Zakat should be calculated according to nisab for business – as (1) above
Those eligible to receive Zakat
إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاءِ وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا
وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ
وَالْغَارِمِينَ وَفِي سَبِيل اللّهِ
وَابْنِ السَّبِيلِ فَرِيضَةً مِّنَ اللّهِ وَاللّهُ عَلِيمٌ حَكِيمٌ
Surah At-Taubah, verse 60.
InnamasSadaaqahtu
Alms are for
lilfuqarai walmasakeeni
the poor and the needy (1&2)
walAAmileena ‘Aalayha
and for those employed to administer the (funds) (3)
walmuallafati quloobuhum
for those whose hearts have been (recently) reconciled (to Truth) (4)
wafee rriqaabi
for those in bondage (5)
walghaarimeena
and in debt (6)
wafee sabeelillahi
in the cause of Allah (7)
wabni ssabeeli
and for the wayfarer (8)
fareedatan min Allahi
(thus is it) ordained by Allah
waAllahu ‘aleemun hakeem
and Allah is full of knowledge and wisdom.
These are the eight categories as ordained by Allah (swt).
It is more rewarding to give to our deserving relatives and neighbours first like siblings, aunts and uncles, nieces and nephews and so on, especially those living nearby. If there are none deserving in your locality then you may send it to poverty stricken and disaster areas wherever the need is greatest.
Sadaqah for the poor is rewarded as one Sadaqah, but in the case of a relative it is considered as two: (one reward for) retaining the blood tie and (the other reward for) the Sadaqah (itself). Ahmad, an-Nasa’i and Tirmizhi.
Other types of Zakat
In addition, there are other requirements of payment of Zakat such as Zakat al Fitr, Kaffara, Fidya, Damm and Udhiya/Qurbani. At
MPR we facilitate distribution of these types of compulsory Zakat in our projects according to Qur’an and Sunnah.
Those to whom Zakat cannot be given
Zakat cannot be given to the family of the Prophet (saw) Banu Hashim, or his descendants. Nor can it be given to your dependants, descendants and ascendants that you are obliged to support anyway like wife, children, parents, grandchildren and grandparents. However a wife is allowed to give to her husband if he is in need. This is according to the following hadith: Narrated 'Amr bin Al-Harith: Zainab, the wife of 'Abdullah said, "I was in the Mosque and saw the Prophet (saw) saying, 'O women! Give alms even from your ornaments.' “Zainab used to provide for 'Abdullah and those orphans who were under her protection. So she said to 'Abdullah, "Will you ask Allah's Apostle whether it will be sufficient for me to spend part of the Zakat on you and the orphans who are under my protection?" He replied "Will you yourself ask Allah's Apostle?" (Zainab added): So I went to the Prophet and I saw there an Ansari woman who was standing at the door (of the Prophet) with a similar problem as mine. Bilal passed by us and we asked him, 'Ask the Prophet whether it is permissible for me to spend (the Zakat) on my husband and the orphans under my protection.' And we requested Bilal not to inform the Prophet about us. So Bilal went inside and asked the Prophet regarding our problem. The Prophet (saw) asked, "Who are those two?" Bilal replied that she was Zainab. The Prophet said, "Which Zainab?" Bilal said, "The wife of 'Abdullah (bin Masud)." The Prophet said, "Yes, (it is sufficient for her) and she will receive a double reward (for that): One for helping relatives, and the other for giving Zakat." Sahih Bukhari 024:545.
The blessings and benefits of paying Zakat are many
Allah (swt) gives a description of those who pay Zakat in the Qur’an as follows:
The likeness of those who spend their wealth in the way of Allah is as a likeness of a grain (of corn): it grows seven ears, and each ear has a hundred grains. Allah gives manifold increase to whom He pleases. And Allah is All-sufficient for his creatures’ needs, All-Knower. Surah Al-Baqarah, verse 261.
Those who spend their wealth by night and day, in secret and openly, surely their reward is with their Lord, and there shall no fear come upon them neither shall they grieve. Surah Al-Baqarah, verse 274.
In a hadith narrated by Abdullah bin Umar, Allah’s Apostle said, “A Muslim is a brother of another Muslim, so he should not oppress him, nor should he hand him over to an oppressor. Whoever fulfilled the needs of his brother, Allah will fulfil his needs; whoever brought his (Muslim) brother out of discomfort, Allah will bring him out of the discomforts of the Day of Resurrection, and whoever screened a Muslim, Allah will screen him on the Day of Resurrection. Mishkat Al-Masabih, Al-Bukhari and Muslim.
And establish prayer and pay Zakat; and whatever of good you send forth before (you) for your souls, you will find it with Allah. For Allah sees well all that you do. Surah Al-Baqarah, verse 110.
Zakat is an act of worship
As Zakat is an act of worship it can only be given to those who also worship Allah after you have made your intention (niyyah). However, if you donate your Zakat money to
MPR or any Muslim charity to distribute then you must specify it as such, to ensure that it is only used in the manner permissible. The principle of giving Zakat is that the recipient after receiving it in cash or kind becomes the sole owner thus being able to use it as he requires. However, we can use Zakat to buy land to build on it to give to a destitute family in which case the family without a home would directly benefit from it, for example in disaster areas.
To withhold Zakat is a major sin
O you who believe! There are indeed many among the priests and anchorites, who in falsehood devour the substance of men and hinder (them) from the way of Allah. And there are those who bury gold and silver and spend it not in the way of Allah. Announce to them a most grievous penalty. On the day when it (their wealth) will (all) be heated in the fire of Hell, and their foreheads and their flanks and their backs will be branded therewith (and it will be said unto them): Here is that which you hoarded for yourselves. Now taste of what you used to hoard. Surah at-Taubah, verses 34-35.
Narrated by Abu Huraira: Allah’s Apostle said, “Whoever is made wealthy by Allah and does not pay the Zakat of his wealth, then on the Day of Resurrection his wealth will be made like a bald-headed poisonous male snake with two black spots over the eyes. The snake will encircle his neck and bite his cheeks and say, ‘I am your wealth, I am your treasure.’” Then the Prophet recited the following holy verse (3:180): Al-Bukhari, Volume 24, Hadith No 486.
And let not those who greedily withhold of the gifts which Allah has given them of His Grace, think that it is good for them: Nay, it will be the worse for them: soon shall the things which they greedily withheld be tied to their necks like a twisted collar, on the Day of Judgement. To Allah belongs the heritage of the heavens and the earth; and Allah is well acquainted with all that you do. Surah Al-Imran, verse 180.
Sadaqah for worthy causes
One very rewarding aspect of Sadaqah is to reap continuous benefits from long term projects such as erecting tube wells for clean water. This is referred to as Sadaqah Jaaria – continuous reward which one gets as long as people are benefiting from it. This type of Sadaqah can be used for capital investment. At MPR we will use your Sadaqah money for contributing to institutions for buying land, building of orphanages, schools, equipping classrooms with books and other necessary items such as computers etc.
Sadaqah should be of good quality
Whatever you give of Zakat it should be from the good you have and not of inferior quality which you yourself would not like to receive as Allah says in the following verse: O you who believe! Give of the good things which you have (honourably) earned, and of the fruits of the earth which We have produced for you, and do not even aim at getting anything which is bad, in order that out of it you may give away something, when you yourselves would not receive it except with closed eyes. And know that Allah is Free of all wants, and worthy of all Praise. Surah Al-Baqarah, verse 267.
Zakat can only be given from lawful money so if you have interest-based loans or savings accounts you are strongly urged to seek halal alternatives. Just like how Salah is not valid without purification, Zakat is not allowed from unlawful money as Allah says in the following verse:
Allah will deprive usury of all blessing, but will give increase for deeds of charity. Surah Al-Baqarah, verse 276.
Conclusion
It is the duty of every individual to ensure that the money they are handing over to others as their Zakat is not only properly administered but it also goes to the eligible category and that it is not contaminated with funds from haram sources, i.e. interest.
Although it runs into several pages, this is meant to be a brief guide to what is our (MPR’s) understanding of Zakat and Sadaqah based upon the Qur’an and Sunnah. This is the standard we have set on how we will spend your Amanah so that you are assured that your duty towards Allah (swt) is being fulfilled.
However, if you find anything in this article that is not in keeping with Qur’an and Sunnah then please alert us immediately with the supporting evidence so that we may correct ourselves as the Fear of Allah (swt) is utmost in our minds when discharging our duty as trustees of your wealth. May Allah (swt) guide us all on the right path. Ameen.
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