With so little time left in the holy month of Ramadan, Muslims all over the world have started crunching zakat numbers. However, calculating zakat is not as easy as it might sound to some. There are ambiguities and technicalities which can have the better of a beginner at first. In this discussion, we are going to answer some of the most frequently asked questions about zakat in2021. If you are one of those who are planning to pay zakat a bit early this year, this discussion is exactly what you need to read till the very end.
1- What is Nisab?
Nisab is the minimum amount, the threshold that one’s wealth must cross, for the concerned person to be eligible for zakat. Two metrics can define Nisab amount, namely gold and silver. By gold standard, Nisab is three ounces of gold or cash equivalent to it, while for silver, the stipulated amount is twenty-one ounces.
2- Gold or silver, which one should be used as Nisab?
It depends on the nature of assets a person has. If a person has more gold in his or her possession, then it is better to pay zakat with gold as a reference. The same follows for silver, but paying zakat in gold will mean more amount for the recipients. This is an important charity factor that must be kept in mind.
3- Should zakat be paid on Hajj money?
Zakat must be paid on hajj money once a lunar year is up, and the Nisab threshold is crossed.
4- How can we calculate zakat on shares?
The calculation of zakat on shares differs concerning the type of shares. If shares are bought to make a profit, then zakat is calculated as considering these shares stock. On the other hand, investment shares are bought for receiving dividends, and zakat on these is paid by calculating the company’s zakat-able assets.
5- How can one calculate the value of stock in a shop to pay zakat?
Zakat on a stock is calculated by considering the market value of the entire stock. Some businessmen calculate zakat concerning the price at which the stock was bought, which is a wrong approach.
6- Can zakat be paid in advance?
If a person’s wealth meets the minimum requirement of the Nisab threshold, then yes, zakat can be paid in advance.
7- Who is eligible to receive zakat?
According to Holy Quran, the following are the only ones eligible to receive zakat:
“Zakat expenditures are only for the poor and for the needy and for those employed to collect [zakat] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler – an obligation [imposed] by Allah. And Allah is Knowing and Wise”. (9:60)
8- Which assets must be considered when calculating zakat?
Cash, jewellery (gold/silver), stocks, livestock, precious possession, and productive business assets are some of the assets that must be considered when calculating zakat.
9- Are there any assets that we can skip during zakat calculations?
Properties that are not used for business, cash used for managing the expenditures of the house, clothing are some of the assets that are non-zakat-able assets.
10- Can zakat be paid in Ramadan only?
Although Muslims all around the world pay zakat mostly in Ramadan, it is not mandatory to do so. Zakat can be paid at any time of the year, provided that the Nisab threshold is met.
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11- Who are not eligible to receive zakat?
Zakat cannot be given to blood relatives like parents, grandparents, or children. The same follows for husband and wife, and non-Muslims as well.
12- At which date does the zakat year begin?
Zakat year begins from the date on which a person had wealth equivalent to or above the Nisab threshold. One must pay zakat, once the seed date comes around.
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13- If the total wealth falls below Nisab for a few months, does one still have to pay zakat by the end of the year?
Fluctuations that occurred during the year do not matter, it is the total wealth at the beginning and the end of the year that matters.
14- Does one have to pay zakat on pension funds?
If the bank does not make any deductions on the pension fund, then zakat must be paid by the receiver of the pension. However, in case the pension fund released is one that comes with zakat deducted on it by the government, then one is exempt from paying further zakat on it.
15- Does the person in debt has to pay zakat?
If a person’s wealth doesn’t meet the minimum zakat threshold because of debts, then he or she is exempt from zakat. Debts are deducted from wealth by principle.
16- What is meant by zakat-al-fitr?
Also known as fitrana, this is a type of Islamic charity that must be paid before the Eid-ul-fitr prayer. A family’s head can pay zakat-ul-fitr on the behalf of every family member.
17- Is giving the charity the same as giving zakat?
While giving charity is a commendable act, and one that comes with its rewards, zakat cannot be equated with charity. Zakat is an Islamic obligation, charity is a non-mandatory act of generosity.
18- Does one have to pay zakat on lent money?
Yes, one has to pay zakat on the lent money. However, one can wait till the loan is received back and then pay zakat on it in one go.
19- Can zakat be paid online? – Most Frequently asked questions about Zakat
Yes, zakat can be paid online as well. However, one must be extremely cautious while paying zakat via this route. Verifying the zakat eligibility of online campaigns is extremely important. Otherwise, there is a good chance that your donation will be wasted.
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20- Most Frequently asked questions about Zakat is What are zakat liabilities?
Money owed on zakat-able assets is termed as a liability. Liabilities are deducted from the zakat calculation.