What type of wealth are included in zakat?

What type of wealth are included in zakat?

type of wealth in zakat

Introduction

Zakat is much more than a religious obligation. It is a revolutionary micro financial system on which millions bank their hopes, every Islamic year. Hence, calculating zakat accurately s particularly important since this charity can make someone’s future, provide someone with another chance at life. In today’s discussion, we are going to discuss a subtopic of zakat calculations (type of wealth in zakat) that many Muslims struggle to comprehend every time they sit down to calculate zakat on their assets! We suppose if we had to formulate the subtopic into a question, it would be similar to one that you read in the title. Which type of wealth assets are included in zakat? Read this discussion till the very end, if you are in pursuit of a satisfactory answer to this question. Lots to learn from this discussion, we can promise you that much! 

Wealth & zakat conditions

We know that most of you have a pretty decent knowledge of the zakat-able assets like cash, property, and jewelry to name a few. Hence, there is no point in elaborating what we presume you already are well familiar with. Instead, we are going to talk about the conditions that determine if a Muslim should pay zakat from his or her wealth or not. For the sake of keeping things simple, we are going to talk about these conditions in separate tabs in the following sections of this discussion.

1- Absolute Ownership

A Muslim must acknowledge the fact that all he or she has is granted and given to him or her by Allah SWT’s mercy. The true owner of everything that a Muslim has is Allah SWT. With that sense of gratitude in mind, whatever zakat a Muslim pays to an underprivileged member of the society becomes the latter person’s unshared property. This is a condition of zakat, there can be no shared or mutual benefits that both the donors and recipients can enjoy. This is one of the most basic conditions of zakat that must be satisfied.

2- Growth

We now turn the focus of this discussion towards the more technical side of things. One important question that must be answered satisfactorily is about the growth of assets and property. What does growth mean in this scenario? We are talking about assets that either provide profit, or ones that are produced as a result of the aforementioned profit or growth. The important thing to understand here is that zakat must be paid on assets that qualify as a surplus only. So, assets that are in personal use, for example, furniture or vehicle, are exempt from zakat. To make things even simpler for your understanding, let us take the example of crops. Zakat must be paid only on the annual harvest, and it is calculated at a fraction of yield as well.

3- Quantity (minimum)

We are talking about Nisab in this section, the lowest threshold of the wealth that a Muslim must possess to be eligible for zakat. The best way to describe Nisab would be to take different types of wealth as standard and then mention the Nisab with reference to these. Let us start with personal wealth, and take gold as a standard. Nisab for gold is 3 Oz., the zakat rate is the standard 2.5 percent. The same follows for business wealth, which includes trade goods and exploited assets. On the other hand, rules are slightly different for agricultural produces. For the irrigated crops, five percent of the harvest must be paid in zakat while for the non-irrigated crops, ten percent of the harvest must be paid in zakat. In terms of weight, the number is around 653 KG. The next wealth type that is possessed by farmers more than those living in cities is livestock. The zakat percentages are different with regards to bovine and ovine animals. And as far as treasure troves like natural resources are concerned, at least 20 percent must be paid in zakat on those.

4- Abundance

This a further reiteration of the point that we have discussed earlier in this discussion as well. Again, it must be noted that zakat is to be paid on what a Muslim doesn’t use in his personal life daily. And while there is a bit of disagreement between the Muslim scholars on the topic of interaction between zakat and Nisab, there must be no confusion about the point of surplus that we have been emphasizing on throughout this discussion. What does not qualify under surplus? A pertinent question that must be answered objectively. Well, necessities like food, water, shelter, living expenses, and certain other needs must be catered before calculating zakat on wealth.

5- Debtless or not

We are talking about solvency here. The state in which a person is completely free from the shackles of debt. It is the opinion of most Muslim scholars that debt exempts a Muslim from the obligation of zakat. And while there is a different opinion on this point as well, it must be noted that there are two types of debts. There are debts to Allah SWT, and there are debts to people. It is imperative to consider both types of debts before calculating zakat.

6- Lunar lapse

Zakat must be paid only once a year on the profit that an adult Muslim makes from any of the wealth types that we discussed earlier in this discussion. Most Muslims pay zakat in Ramadan, but it can be paid at any point during the Islamic year.

Conclusion – Type of wealth in Zakat

Well, folks that would be all from this discussion. Zakat’s importance in 2021 is greater than ever, given the crisis that the pandemic gave birth to. Millions of Muslims all around the world need our help, and one fine of helping those in distress is to support them financially. Zakat is the perfect way to help these troubled souls, and as we said earlier, calculating zakat accurately becomes extremely important. To ensure that your zakat calculations are error-free, you can use an online zakat calculator as well. With that word of advice, we bid you farewell from this discussion.

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