What is Zakat in Islam? A Complete Guide

Zakat is the third pillar of Islam and one of the most important obligations that Muslims must fulfill. The word Zakat comes from Zakah, which means purification. The spiritual purification of wealth is an important aspect in Islam. Besides spiritual blessings, Zakat is an important instrument of change. It has the power to create more equitable societies by redistributing resources. A study by the UN reveals that the total global Zakat pool is somewhere between USD 200 billion and USD 1 trillion. That is a significant amount that can change many lives. Zakat is obligatory because it is commanded by Allah (SWT). It also creates opportunities for underprivileged and deserving segments of society. In this article, let’s address the question: what is Zakat in Islam from the Hanafi perspective?

What is Zakat?

The word Zakat means purification. Zakat is obligatory almsgiving in Islam. It is one of the fundamental requirements that must be fulfilled every Islamic year. According to a Hadith, Zakat is meant to purify a believer’s wealth, and it is a testimony of a believer’s faith in Allah (SWT)

Why Is Zakat One of the Five Pillars of Islam?

A person who believes in Allah (SWT) must submit to His will unconditionally. That’s the fundamental essence of Islamic teaching. For a believer, the life of this world is temporary. It is a test, and every moment of a believer’s life is an opportunity to please Allah (SWT). The Quran clearly states that wealth is a trial.

“Your wealth and your children are but a trial, and Allah has with Him a great reward.” (Surat At-Taghābun, 64:14)

While wealth is a blessing, it is also a source of trial. The following Hadith warns us against the excessive love for wealth and power:

Messenger of Allah (ﷺ) said, “Verily, there is a Fitnah (trial) for every nation and the trial for my nation (or Ummah) is wealth.” (Riyad as-Salihin 480)

Zakat saves us from an obsessive love for accumulating wealth. That’s one of the reasons why it is considered to be one of the fundamental pillars of Islam.

Who Is Required to Pay Zakat?

Zakat is obligatory charity in Islam that must be given by adult and sane Muslims who have wealth equal to or greater than the Nisab value.

What is Nisab?

The Nisab value is equivalent to the value of 612.36 grams of silver or 87.48 grams of gold. Most Hanafi scholars recommend calculating the Nisab value according to the market value of silver. Zakat is an annual obligation which must be calculated and given every lunar year (Islamic).

Conditions for Paying Zakat

Zakat rules must be followed thoroughly. It becomes obligatory on Muslims in the following conditions:

• The Zakat payer should be an adult, sane Muslim.
• The Zakat-giver must have total control and ownership of their wealth.
• The Zakat giver must have wealth that meets or exceeds the Nisab threshold.
• Short-term debts and other liabilities are subtracted from the wealth calculation before reaching the Zakat obligations. Items of personal use also aren’t included in Zakat.
• The total Zakat obligation is equal to 2.5% of your net wealth, which is calculated after subtracting your immediate debt and other liabilities and determining the Nisab eligibility.

When Does Zakat Become Obligatory?

Zakat is a recurring obligation and must be given each year. To qualify for Zakat, the Zakat-qualified wealth or assets must remain equal to or greater than the Nisab value at the beginning and end of the Islamic lunar year (hawl). Many Muslims give Zakat during Ramadan to support the community. However, it must be remembered that delaying Zakat is not permitted. You can, however, give Zakat in advance. This allows you to safely pay Zakat during Ramadan and adjust your Zakat-giving cycle. You can also pay Zakat periodically throughout the year.

How Is Zakat Calculated?

Calculating Zakat is easy. Once Nisab eligibility is assessed, all you have to do is calculate the sum of your Zakatable wealth. You can deduct your immediate debts and liabiilities from it. 2.5% of the remaining amount is your Zakat obligation.

What Wealth Is Subject to Zakat?

 Although items of personal use are not included in the calculation, the following must be part of your calculations:

• Gold, including gold jewellery used for personal adornment.
• Silver, including silver jewellery used for personal adornment.
• Cash in banks
• Cash in hand
• Money deposits in Jazz Cash/EasyPaisa/Other digital platforms
• Financial Investments
• Loans given to others
• Trade merchandise that also includes unsold goods purchased for sale
• Money invested in the local committee system

Who Can Receive Zakat?

The eligibility for receiving Zakat is clearly mentioned in the following Quranic verses:

“Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] 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.” (Surat At-Tawbah, 9:60)

Benefits of Paying Zakat

Zakat is an individual act of piety that is required to purify wealth. The importance of Zakat in Islam can be determined by the frequency with which the subject is discussed in the Quran and the Hadith. Besides the personal spiritual gains, it helps make the world a better place for everyone. Zakat can help many families manage their livelihood while supporting causes such as access to healthcare. It presents a great template for maintaining harmony in society.

Common Mistakes People Make When Paying Zakat

Paying Zakat is one of the most important duties for Muslims. We must always try to do it in the right spirit and avoid the following mistakes:

Miscalculating Wealth

It is easy to make mistakes while calculating wealth. You can use an online Zakat calculator to list your items of wealth and carefully calculate your Zakat obligation.

Giving to Ineligible Recipients

Zakat must always be given to Muslims who belong to one of the categories explicitly mentioned in the Quran.

Forgetting Business Assets

Business assets are also your wealth. Don’t forget to add them to your Zakat calculations.

Delaying Zakat

Don’t risk delaying Zakat. Remember that we must all return to Allah (SWT). Therefore, don’t delay your Zakat-giving. Many of us like to give our Zakat during Ramadan to support our communities and seek spiritual rewards of Laylatul Qadr. That should be done by adjusting your Zakat-giving cycle by paying advanced Zakat for the upcoming period.

Can Zakat Be Used for Surgical and Medical Treatment?

Zakat can be used for surgical and medical treatments of needy patients. However, it must be ensured that the patients are Zakat-eligible. Many charities collect and spend Zakat on the treatment of needy patients. However, before committing your Zakat to a charity, make sure it is Shariah-compliant. When given to a responsible charity, Zakat can become a lifeline for many patients. Charities use it to support surgeries, medical treatments, and help people in the wake of disasters and emergencies. The impact of Zakat given for medical purposes isn’t limited to individuals. In many cases, it helps uplift the entire community.

How to Pay Zakat Responsibly?

Whether you are paying Zakat individually or entrusting a charity, the Zakat-eligibility of the recipients must always be verified. When choosing charities for Zakat, always opt for transparent organizations that take Shariah-compliance seriously. Giving regular Zakat is a great idea, because it can help underprivileged patients throughout the year. Now you can easily pay Zakat online and keep creating impact in the lives deserving of your compassion.

Conclusion

In this article, we discussed, “What is Zakat in Islam?” Zakat is not only a financial obligation. It is a demonstration of faith. Developing an understanding of Zakat is extremely important for all Muslims. Not only should we calculate Zakat, but we should also understand its wider purpose. That also includes understanding Zakat eligibility and the categories of people who can receive Zakat. We must find the best charities that are Shariah-compliant, reliable, responsible, and purpose-driven. By supporting healthcare-related charities, you can restore hope for a better future for many underprivileged families desperately waiting for assistance.

---