Zakat

Zakat

WHAT IS ZAKAT?

The term zakat means alms; it is an obligation upon all Muslims and it forms one of the central Five Pillars of Islam. The actual meaning of zakat is purification and growth, thus encouraging growth amongst the population and community whilst sharing one's wealth with his fellow beings.

Giving zakat is seen as a duty in Islam. It becomes obligatory upon an individual when a certain amount of maintained money or wealth is reached and exceeded. If the amount of profitable wealth falls below the nisab values at the time of zakat, then that individual is not liable to pay zakat in that given lunar year. If the amount of profitable wealth exceeds the nisab value, then 2.5% of the amount above the nisab value becomes liable for zakat.

WHERE DOES ZAKAT GO?

 Zakat is distributed amongst eight groups of people that are mentioned in the Holy Qur’an:

  • The Poor
  • The Needy
  • An Islamic Revert in Need
  • The Collector of Zakat
  • Slaves
  • A Stranded Traveller in Need
  • A Debtor
  • Those Practising; But in Need and Away from Home

Calculate

If a Muslims' net capital income or maintained wealth exceeds the applicable nisab value amount then they are liable to pay zakat in the relevant lunar year.

The latest nisab values for 2018 are as follows:

  • Gold: £2,987.01 (87.5g)
  • Silver: £255.21 (625g)

It is important to bear in mind that Zakat is not only payable on gold, silver and cash, it is also payable on any business profits, investments, any money owed to you, shares, property income, and bonds. The zakat payable is based on the relevant sums at the time of paying the sums (at the end of the complete lunar year) as, understandably, maintained profit can vary over the course of the year.