How to calculate Zakaat?

How to calculate Zakaat  

Zakaat becomes Imperative only when the wealth meets the criterion prescribed by the Shariah.  The Holy Prophet (Sallallahu alaihi wa sallam) has fixed the criteria for gold, silver and animals.  There is a Hadith in Sunan Daraqutni about the criterion for gold: 

Translation: Hadhrat ‘Amr bin Shu’aib narrates on the authority of his father, he from his grandfather, and he from the Holy Prophet (Sallallahu alaihi wa sallam) that He said: There is no Zakaat on less than 5 camels.  There is no Zakaat on goats less than 40.  There is no Zakaat on cattle less than 30.  There is no Zakaat no gold which is less than 20 Mithqaal.  There is no Zakaat on silver less than 200 Dirhams………In the harvest which is through natural water, it is 10 percent and in the harvest which is through the water of wells, etc., it is 20 percent.  (Sunan Daraqutni, Hadith No. 1925)

In modern units of measurement, the scholars have calculated that the aforementioned criterion comes to 60 grams 755 milligrams of gold or 425 grams 285 milligrams of silver or its equivalent wealth.

 

More than basic needs

The government charges tax on the income of an individual, regardless of what the expenses of that individual are.  However, Islam has imposed Zakaat not on income but on savings.  Zakaat is Imperative on the wealth left over after the basic needs of an individual are fulfilled.

 

Food for oneself and the members of the family, a house for residence, vehicles, clothes, the articles of the house or office, the tools and implements of work are all included in basic needs.  If money for the above is present and 1 year hasn’t passed on it, then that money will not be included in the calculation of Zakaat, as the basic needs are dependent on them.  If any amount is included in calculation of Zakaat which is already involved in something else, then it will cause difficulties.  However, if that amount has been in saving for 1 whole year, then Zakaat is Imperative on it.  As mentioned in Al Bahr Ur Raaiq, Vol. 1, Pg. No. 361.

  

Absolute possession of the wealth
 

Among the conditions for Zakaat to be Imperative is that it should be in absolute possession of the individual.  Absolute possession is when the individual has ownership as well as possession of the wealth.  If ownership is there, but possession isn’t or if possession is there but no ownership, then it isn’t considered to be absolute possession and as such Zakaat isn’t Imperative.  As mentioned in Radd Ul Muhtaar, Kitab Uz Zakaat.

 

Having possession but not ownership can be explained with the example of a borrower.  A borrower will have possession of the amount borrowed but isn’t the owner of it.  As such, when calculating Zakaat, this debt will not be included in it.

 

1 whole year should have passed on the wealth

 Even after one has wealth that meets the prescribed criterion for Zakaat, it is necessary that 1 complete year should have passed on it.  This condition shows the ease and convenience of the system of Zakaat.

 

The wealth should be free of debt

One among the conditions of Zakaat is that the wealth should be free of debt.  If an individual has wealth that meets the prescribed criterion of Zakaat and that person has such debts that on subtracting the debt from the wealth that person’s wealth doesn’t meet the prescribed criterion of Zakaat, then the Shariah doesn’t impose Zakaat on such a person.

  

From when should the beginning of the year be considered?

It has already been described that a year should pass on the wealth for Zakaat to become Imperative.  The beginning of the year is the date on which an individual becomes the absolute owner of 60 grams 755 milligrams of gold or 425 grams 285 milligrams of silver or its equivalent wealth.  As per the research of the scholars of North India, the criterion of gold is 87 grams 480 milligrams and of silver is 612 grams 360 milligrams.  When a year passes and the same date comes, then Zakaat becomes Imperative.

If at the end of the year, the wealth is reduced then Zakaat isn’t Imperative.  If at the beginning of the year and at the end of the year, the wealth meets the prescribed criterion, but it was reduced in the course of the year, then Zakaat will remain Imperative.

  

Zakaat should be given on which price?

The price of gold/silver isn’t the same as when it was bought.  When giving Zakaat, which price should be considered?  The Jurists have clarified in this regard that the market price when giving Zakaat will be considered.  Another question in this regard is whether Zakaat should be given on selling price of buying price?  The Jurists have clarified that the price which is more beneficial for the needy folk will be considered.  As given in Radd Ul Muhtaar, Kitab Uz Zakaat.

  

What if the criterion of gold isn’t met?

Some people have 15,000 or 20,000 rupees.  While this amount is not equal to the criterion for gold, but this amount does meet the criterion of silver and giving Zakaat is Imperative on such people.  This ruling is more beneficial to the poor and needy folk and it is Imperative on such people to give 2.5% of their wealth in Zakaat.  As mentioned in Fath Ul Qadeer, Vol. 2, Pg. No. 227.

  

How to calculate Zakaat – At a glance

Zakaat becomes Imperative 1 lunar year from the date when one’s wealth meets the prescribed criterion of Zakaat.  The increase in the course of the year also should be considered.  One should carefully search for all avenues where one might have invested wealth.  The quantity of gold and silver should be calculated.  The amount under fixed deposit (if any) should also be included.  The amount in bonds also should be included.  Provident fund also should be included.  Shares of various companies also should be included.  If one holds any insurance policy, then the amount paid in it till now should also be included.  If one is a businessman, then the value of all trade goods should also be included.  If any loan has been given to anybody, it should also be included.  The amount in bank accounts should also be included.

After calculating the total value of all forms of wealth that one possesses, loans payable to anybody should be subtracted.  The 40th part (i.e. 2.5%) of the remaining wealth should be given as Zakaat.  It should be given on the completion of 1 lunar year.