ZAKAH (Obligatory Charity) / Sadaqah al-Fitr

ZAKAH (Obligatory Charity)

One of the most important principles of Islam is that all things belong to Allah (The One & Only God), and that wealth is therefore held by human beings in trust.

The word Zakat means both purification and growth.

Our possessions are purified by setting aside a proportion for those in need, and, like the pruning of plants, this cutting back balances and encourages new growth.

Zakat is the amount of money that every adult, mentally stable, free, and financially able Muslim, male and female, has to pay to support specific categories people.

This category of people is defined in surah at-Taubah (9) verse 60: " The alms are only for the poor and the needy, and those who collect them, and those whose hearts are to be reconciled, and to free the captives and the debtors, and for the cause of Allah, and (for) the wayfarers; a duty imposed by Allah. Allah is knower, Wise." (The Holy Quran 9:60).

The obligatory nature of Zakat is firmly established in the Holy Quran, the Sunnah (or hadith), and the consensus of the companions and the Muslim scholars.

Allah (The One God) states in Surah at-Taubah verses 34-35: "34:

O ye 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 unto them a most grievous penalty- 35:

On the Day when heat will be produced out of that (wealth) in the fire of Hell, and with it will be branded their foreheads, their flanks, and their backs, their flanks, and their backs.- "This is the (treasure) which ye buried for yourselves: taste ye, then, the (treasures) ye buried!" (The Holy Quran 9:34-35).

The Holy Prophet said: "Any owner of gold and silver who does not deliver from them their right, on the Day of Qiyamah (Day of Judgment), (the gold and silver) will be shaped as foils of fire. Then it will be heated in the fire of Hell; (and) then with it he will be ironed on his side, his forehead, and his back" (Muslim).

It is agreed between Muslims in all the centuries the obligatory nature of paying Zakat for gold and silver, and from those the other kinds of currency.

Zakat is obligatory when a certain amount of money, called the nisab is reached or exceeded. Zakat is not obligatory if the amount owned is less than this nisab.

The nisab (or minimum amount) of gold and golden currency is 20 mithqal, this is approximately 85 grams of pure gold. One mithqal is approximately 4.25 grams.

The nisab of silver and silver currency is 200 dirhams, which is approximately 595 grams of pure silver.

The nisab of other kinds of money and currency is to be scaled to that of gold, 85 grams of pure gold. This means that the nisab of money is the price of 85 grams of 999-type (pure) gold, on the day in which Zakat is paid.

When is Zakat Due ?

1. Passage of One Lunar Year:

Zakat is obligatory after a time span of one lunar year passes with the money in the control of it's owner. Then the owner needs to pay 2.5% (or 1/40) of the money as Zakat. (A lunar year is approximately 355 days).

2. Deduction of Debts:

The owner should deduct any amount of money he or she borrowed from others; then check if the rest reaches the necessary nisab, then pays Zakat for it.

If the owner had enough money to satisfy the nisab at the beginning of the year, then the money increased (in profits, salaries, inheritance, grants...etc.), the owner needs to add the increase to the nisab amount owned at the beginning of the year; then pay Zakat, 2.5%, of the total at the end of the lunar year. (there are small differences in the fiqh schools here)

Each Muslim calculates his or her own Zakat individually. For most purposes this involves the payment each year of two and a half percent of one's capital.

 

 

 

A pious person may also give as much as he or she pleases as sadaqa, and does so preferably in secret. Although this word can be translated as 'voluntary charity' it has a wider meaning. The Holy Prophet said 'even meeting your brother with a cheerful face is charity.'

The Holy Prophet said: 'Charity is a necessity for every Muslim. ' He was asked: 'What if a person has nothing?' The Holy Prophet replied: 'He should work with his own hands for his benefit and then give something out of such earnings in charity.' The Companions asked: 'What if he is not able to work?' The Holy Prophet said: 'He should help poor and needy persons.' The Companions further asked 'What if he cannot do even that?' The Holy Prophet said 'He should urge others to do good.' The Companions said 'What if he lacks that also?' The Holy Prophet said 'He should check himself from doing evil. That is also charity.'

 

As for reminding ..........

 

What is Zakat?

Zakat is an obligatory duty and one of the five pillars of Islam. It is mandatory when two conditions are simultaneously satisfied which are Nisab and the Due Date.  

What is Nisab and its current value?

In Sharia (Islamic Jurisprudence) nisab is the amount which savings or capital or product must exceed in order for the Muslim owner to be obliged to give zakat. Several hadith have formulas for calculating nisab. One of the most well known states that No Zakat is due on wealth until one year passes.

In general, nisab is considered an amount equal to the essential needs of a person or family for one year.

When is Zakat due date?

Zakat is due after one Lunar (Hijri) year starting from either the first day you acquired the amount of Nisab or the day you paid Zakat last year. The month of Ramadhan is considered to be the best time to pay Zakat.

The Wisdom behind Zakah

 

Difference between Zakah and Zakah-ul-Fitr?

 

 

Sadaqah al-Fitr 

 

 

 
 
 

Meaning 

Zakah al-Fitr is often referred to as Sadaqah al-Fitr. The word Fitr means the same as Iftaar, breaking a fast and it comes from the same root word as Futoor which means breakfast. Thus, Islaamically, Zakaah al-Fitr is the name given to charity which is distributed at the end of the fast of Ramadaan. 
 

 

Classification 
Sadaqah al-Fitr is a duty which is Waajib on every Muslim, whether male or female, minor or adult as long as he/she has the means to do so. The proof that this form of charity is compulsory can be found in the Sunnah whereby Ibn `Umar reported that the Holy Prophet (sallallaahu `alaihi wa sallam) made Zakaah al-Fitr compulsory on every slave, freeman, male, female, young and old among the Muslims; one Saa` of dried dates or one Saa` of barely.[1] The head of the household may pay the required amount for the other members. Abu Sa'eed al-Khudree said, "On behalf of our young and old, free men and slaves, we used to take out during Allah's Messenger's (sallallaahu 'alaihi wa sallam) lifetime one Saa` of grain, cheese or raisins".[2] 
 

 

Significance 
The significant role played by Zakaah in the circulation of wealth within the Islamic society is also played by the Sadaqah al-Fitr. However, in the case of Sadaqah al-Fitr, each individual is required to calculate how much charity is due from himself and his dependents and go into the community in order to find those who deserve such charity. Thus, Sadaqah al-Fitr plays a very important role in the development of the bonds of community. The rich are obliged to come in direct contact with the poor, and the poor are put in contact with the extremely poor. This contact between the various levels of society helps to build real bonds of brotherhood and love within the Islamic community and trains those who have, to be generous to those who do not have. 
 

Purpose 
The main purpose of Zakaah al-Fitr is to provide those who fasted with the means of making up for their errors during the month of fasting. Zakaah al-Fitr also provides the poor with a means with which they can celebrate the festival of breaking the fast (`Eid al-Fitr) along with the rest of the Muslims. Ibn Abbaas reported, "The Holy Prophet (sallallaahu 'alaihi wa sallam) made Zakaah al-Fitr compulsory so that those who fasted may be purified of their idle deeds and shameful talk (committed during Ramadan) and so that the poor may be fed. Whoever gives it before Salah will have it accepted as Zakaah al-Fitr, while he who gives it after the Salah has given Sadaqah."[3] Hence, the goal of Sadaqah al-Fitr is the spiritual development of the Believers. By making them give up some of their wealth, the believers are taught the higher moral characteristics of generosity, compassion (sympathy for the unfortunate), gratitude to Allah (The One & Only God) and the righteousness. But, since Islam does not neglect man's material need, part of the goal of Zakaah al-Fitr is the economic well-being of the poorer members of society. 
 

 

Conditions 
Zakaah al-Fitr is only Waajib for a particular period of time. If one misses the time period without a good reason, he has sinned and can not make it up. This form of charity becomes obligatory from sunset on the last day of fasting and remains obligatory until the beginning of Salah al-'Eid' (i.e. shortly after sunrise on the following day). However, it can be paid prior to the above mentioned period, as many of the Sahabah [companions of the Prophet (sallallaahu 'alaihi wa sallam)] used to pay Sadaqah al-Fitr a couple days before the `Eid. Naafi reported that the Prophet's companion Ibn `Umar used to give it to those who would accept it and the people used to give it a day or two before the `Eid.[4] Ibn `Umar reported that the Holy Prophet (sallallaahu 'alaihi wa sallam) order that it (Zakah al-Fitr) be given before people go to make the Salah (al-'Eid). And Ibn `Abbaas reported that the Prophet (sallallaahu 'alaihi wa sallam) said, "Whoever gives it before the Salah will have it accepted as Zakaah al-Fitr, while he who gives it after the Salah (will not, for it will only be considered as) ordinary charity. Therefore, one who forgets to pay this Zakaah al-Fitr on time should do so as soon as possible even though it will not be counted as Zakaah al-Fitr. 
 

Rate 
The amount of Zakaah al-Fitr is the same for everyone regardless of their different income brackets. The minimum amount is one Saa` (two handfuls ) of food, grain or dried fruit for each member of the family. This calculation is based on Ibn `Umar's report that the Holy Prophet (sallallaahu 'alaihi wa sallam) made Zakaah al-Fitr compulsory and payable by a Saa` of dried dates or a Saa` of barley. The Sahaabee, Abu Sa`eed al-Khudree said, "In the Prophet's time, we used to give it (Zakaah al-Fitr) as a Saa` of food, dried dates, barley, raisins or dried cheese".[5]

[1] Collected by Bukhaaree - Arabic/English, vol. 2, p. 339, no. 579 
[2] Collected by Muslim - English transl. vol. 2, p. 469, no. 2155 
[3] Collected by Abu Dawood - Eng. transl. vol. 2, p. 421, no. 1605 - rated Saheeh by Shaikh Naser Al-Albanee 
[4] Collected by al-Bukhaaree - Arabic/English, Vol. 2, p.339, no. 579 
[5] Collected by al-Bukhaaree - Arabic/English vol. 2, p. 340, no. 582

Economic Principles Of Islam

 

 

 

 

Economic Principles Of Islam

by Syed Abul Aala Maududi

 

 

 

 

 

Islam has laid down certain principles and limits for the economic activity of man so that the entire pattern of production, exchange and distribution of wealth may conform to the Islamic standard of justice and equity. Islam does not concern itself with time-bound methods and techniques of economic production or with the details of organizational patterns and mechanisms. Such methods are specific to every age and are evolved in accordance with the needs and requirements of the community and the exigencies of the economic situation. Islam’s concern is that whatever the particular form of economic activity in operation, its underlying principles should always be the same.

 

According to the Islamic point of view, Allah (The One & Only God) has created for mankind the earth and all that it contains. It is, therefore, the birthright of every human being to try to secure his share of the world’s wealth and sustenance. Islam does not allow a particular person, class, race or group of people to create a monopoly in certain economic activities : equal opportunities for all is its watchword.

 

 

 

Right of Property

Resources which are provided by nature and which can be used directly by man may be utilised freely, and everyone is entitled to benefit from them according to his needs. Water in the rivers and springs, timber in the forests, fruits of wild plants, wild grass and fodder, air, animals of the jungle, minerals under the surface of the earth and similar other resources cannot be monopolised by anyone nor can restrictions of any sort be imposed on their free use by Allah’s (The One God's)

creatures to fulfill their own needs. Of course, people who want to use any of these things for commercial purposes can be required to pay taxes to the state. Or, if there is misuse of the resources, the Government may intervene. But there is nothing to prevent individuals availing themselves of Allah’s (The One God's) earth as long as they do not interfere with the rights of others or of the state.

 

 

It is not right that things created by Allah (The One God) for the benefit of mankind should be taken possession of, and then kept idle and useless. One should either benefit from them oneself, or make them available to others. On the basis of this principle Islam holds that no one can keep his land unused for more than three years. If, during this period, he does not himself use it for cultivation or for construction of buildings or for some other purpose, such lands shall be treated as ‘vacated’, and anyone else who makes use of it shall not be liable to be proceeded against in law, nor shall the Government have any authority to hand it over to someone else (including the previous owner).

 

 

Anyone who takes possession of the earth’s natural resources and puts them to good use acquires a rightful title over them. For instance, if somebody takes possession of an uncultivated piece of land, on which nobody has a prior right of ownership, and makes productive use of it, he cannot be arbitrarily dispossessed of that piece of land.

This is how every right of ownership originated in the world. When man first appeared, everything was available to everyone, and whoever took possession of anything and made it useful in any manner became its owner; that is to say, he acquired the right to use it specifically for his own purpose and to obtain compensation from others if they wanted to use it. This is the natural basis of all the economic activity of mankind.

 

 

The rights of ownership are to be honoured, though it is always open to ascertain if a particular ownership is legally valid or not. Islam cannot approve of economic policies which destroy the rights conferred by the Shari‘ah, however attractive their names may be and whatever welfare pretensions they may make. Social justice and collective good are very dear to Islam, but in their name the rights given by the Shari‘ah cannot be trampled. It is as unjust to reduce or remove the restrictions placed by the Shari‘ah, for the sake of the good of the community as a whole, on the rights of individual ownership as it is to add restrictions and limitations on them which do not fit into the Shari‘ah. It is one of the duties of an Islamic state to protect the legal rights of individuals and, at the same time to compel them to fulfill their obligations to the community as enjoined by law. That is how Islam strikes a balance between individualism and collectivism.

 

 

 

The Problem of Equality

Allah (The One God) has not distributed His gifts and favour equally among mankind but, in His infinite wisdom, has given some individuals more than others. Just as this is true of pleasantness of voice, excellence of physique and intellectual power and so on, so, too, is it the case with the material conditions of life. Human existence has been so ordained that divergence, variety and inequality among men in their ways and standards variety and inequality among men in their ways and standards of living seems to be natural. Variety is the spice of life, and the driving spirit behind human endeavour and excellence.

 

Allah (The One God) has not distributed His gifts and favour equally among mankind but, in His infinite wisdom, has given some individuals more than others. Just as this is true of pleasantness of voice, excellence of physique and intellectual power and so on, so, too, is it the case with the material conditions of life. Human existence has been so ordained that divergence, variety and inequality among men in their ways and standards variety and inequality among men in their ways and standards of living seems to be natural. Variety is the spice of life, and the driving spirit behind human endeavour and excellence.

 

 

Consequently, all those ideologies which want to force an artificial economic equality on mankind are mistaken, unrealistic and impossible to realise. The equality which Islam believes in is equality of opportunity to secure a livelihood and to climb the ladder of success and prosperity. Islam desires that no obstacles should exist in society to prevent an individual from striving for a living according to his capacity and talents; nor should any social distinctions exist with the object of safeguarding the privileges of a certain class, race, dynasty or group of people.

 

 

All those ideologies which serve vested interests, or which seek to perpetuate the power of a certain group, are also repugnant to Islam and can have no place in its scheme of things. Such movements seek to establish, through force if necessary, an unnatural inequality in place of the natural limited inequality which provides incentive to effort in society. At the same time, Islam does not agree with those who want to enforce complete equality in respect of the means of production and the fruits of economic endeavour, as they aim at replacing limited natural inequality by an artificial equality.

 

 

Only that system can be the nearest to human nature in which everyone joins the economic struggle at his own level and in the circumstances in which Allah (The One God) has created him. He who has inherited an aeroplane should make use of it; while he who has only a pair of legs should stand on his feet and try to improve his lot. The laws of society should neither be such as would establish a permanent monopoly for the aeroplane-owner (over his aeroplane) and make it impossible for the bare-footed to acquire an aeroplane nor such that the race for everyone should compulsorily begin from the same point and under the same conditions so that they would all be tied to each other right till the end of the race. On the contrary, economic laws should be such as to make it possible for the bare-footed, who started his race under adverse conditions, to possess an aeroplane, if he can do so by dint of his effort and ability, and for he who inherited the aeroplane to be left behind in the race and to lose it, if he does not have the ability or efficiency to keep it. Effort should be rewarded and laziness penalised.

 

 

 

Social Justice

Islam does not want this economic race to take place in an atmosphere of moral neutrality and social apathy. The participants should be just and kind to one another. Islam, through its moral injunctions, aims at creating a feeling of mutual love and affection among people, through which they may help their weak and weary brethren, and at the same time create a permanent institution in society to guarantee assistance to those who lack the necessary means and abilities to succeed. People who are unable to take part in the economic race and those who need help to get started in it should receive their share of the blessings of life from this social institution.

 

 

To this end Islam has commanded that Zakat should be levied at the rate of two and a half percent per annum on the total accumulated wealth [of each individual] in the country, as well as on invested capital; five percent or ten percent, depending on the method of watering, should be collected on agricultural produce; and twenty percent on certain mineral products. The annual Zakat should also be levied, at a specified rate, on cattle owned by anyone who has more than a certain minimum number. The amount of Zakat thus collected is to be spent on the poor, the orphans and the needy.

 

 

This system provided a means of social insurance where by everyone in an Islamic society is provided with at least the necessities of life. No worker can ever be forced, through fear of starvation, to accept conditions of employment which may be unfairly imposed on him by employer. And nobody’s physical health is allowed to deteriorate for lack of proper medical care and hospitalisation.

 

 

Islam aims at striking a balance between the individual and the community, which will promote individual freedom and at the same time ensure that such freedom is positively conducive to the growth and tranquillity of the community as a whole. Islam does not approve of a political or economic organisation which aims at submerging the identity of the individual beneath that of the community, and depriving him of the freedom essential for the proper development of his personality and talent. The inevitable consequence of nationalising a country’s means of production is the annihilation of the individual by the community; in these circumstances the existence and development of his individuality becomes extremely difficult, if not impossible.

Just as political and social freedom is essential for the individual, economic freedom is necessary for a civilized moral existence. Unless we desire to eliminate completely the individuality of man, our social life must have enough freedom for an individual to be able to earn his living, to maintain the integrity of his conscience and to develop his moral and intellectual faculties according to his own inclinations and aptitudes. Living on the dole or on charity at the hands of others cannot be very satisfying, even if the sums involved are generous: the retardation of mental, moral and spiritual development which it ultimately leads to can never be counteracted by mere physical welfare and prosperity.

 

 

Nor does Islam favour a system of unbridled economic and social freedom which give individuals a blank cheque to achieve their objectives at the possible cost of the good of the community as a whole, or which enables them to misappropriate the wealth of others. Between these two extremes, Islam has adopted the middle course according to which the individual is first called upon, in the interest of the community, to accept certain restrictions, and is then left free to regulate his own affairs. He has freedom of enterprise and competition within a framework which guarantees the good of both the individual and society. It is not possible to explain all these obligations and restrictions in detail and I shall, therefore, content myself with presenting a bare outline of them.

 

 

 

Obligations and Restrictions

Take first the example of earning a living. The meticulous care with which Islam has distinguished between right and wrong in respect of the means of earning wealth is not to be found in any other legal and social system. It condemns as illegal all those means of livelihood which injure, morally or materially, the interests of another individual or of society as a whole. Islamic law categorically rejects as illegal the manufacture and sale of liquor and other intoxicants, adultery, professional dancing, gambling, transactions of a speculative or fraudulent nature, transactions in which the gain of one party is absolutely guaranteed while that of the other part is left uncertain and doubtful, and price manipulation by withholding the sale of the necessities of life.

If we examine this aspect of the economic laws of Islam, we will find a long list of practices declared illegal, most of which can and are making people millionaires in the capitalist system. Islam forbids all these by law, and allows freedom of earning wealth only by those means through which a person renders some real and useful service to the community and thereby entitles himself to fair and just compensation for it.

Islam accepts the right of ownership of an individual over the wealth earned by him by legitimate means; but these rights are not unrestrained. A man can only spend his legitimate wealth in certain specified ways. He may not waste his riches on idle luxury, nor may he use his wealth to behave arrogantly towards his fellows. Certain forms of wasteful expenditure have been unequivocally prohibited at the discretion of an Islamic Government.

 

 

One is permitted to accumulate wealth that is left over after meeting one’s legitimate and reasonable commitments and these savings can also be used to produce more wealth; there are, however, restrictions on both these activities. A rich man will, of course, have to pay Zakah at the rate of two and a half percent a year on the accumulation exceeding the specified minimum. He can only invest it in a business which has been declared legitimate. In this connection, he may own the legitimate business himself or he may make his capital available to others on a profit-loss sharing basis.

 

 

It is not at all objectionable in Islam if, working within these limits, a man becomes a millionaire; rather, this will constitute a Divine favour. But in the interests of the community as a whole, Islam imposes two conditions on the individual: first, that he should pay Zakah on his commercial goods and ‘Ushr (one tenth) on the value of agricultural produce; second, that he should deal fairly and honestly with those he does business with in trade, industry or agriculture, with those he employs and with the Government and the community at large. If he does not voluntarily act justly to others, particularly his employees, the Islamic state will compel him to do so.

 

 

Even wealth that is accumulated within these legal limits is not allowed by Islam to be concentrated at one point or in one place for a long time. Through its law of inheritance Islam spreads it among a large number of people from generation to generation. In this respect the Islamic law is different from that of other inheritance laws; most of them attempt to keep the wealth once accumulated by a person concentrated in the hands of one main beneficiary from generation to generation. In Islam, wealth accumulated by a person in his lifetime is distributed among all of his near relatives soon after his death. If there are no near relatives, distant relatives benefit from it in the proportions laid down by the law for each one of them. And if no distant relative is forthcoming, then the entire Muslim society is entitled to share in the inheritance. Under this law the creation or continuance of any big family of capitalists or landlords becomes impossible.