Zakat #

Introduction #

Islam is a complete and practical code of life. It has stipulated comprehensive rules and regulations to guide the life of humankind. When a person’s earnings reach a prescribed amount exceeding his needs, that person is required to pay a portion of his earnings to the needy. This offering is called Zakat or obligatory charity. Zakat means purification (of the soul). It is one of the five pillars of Islam and it is obligatory. Allah says in the Holy Qur’an: So establish regular Prayer and give Zakat (24:56)

And regarding harvest, Allah says in the Holy Qur’an: Render the dues that are proper on the day that the harvest is gathered. (6:141)

In Islam, there are three forms of worship:

1. Worship which involves the body, such as prayers and fasting.
2. Worship which requires wealth to be performed, such as Zakat.
3. Worship which involves the body and requires wealth to be performed, such as performing pilgrimage or fighting for the course of Allah (Jihad).

So zakat, which was commanded to the Muslims in the second year of the Hijra calendar, is a form of worship which involves wealth; a person has been commanded by Allah to give a portion of his wealth to the poor. The root meaning of the Arabic word Zakat signifies ‘that which has been purified or increased’. By offering this form of worship, Allah purifies one’s wealth, blesses and increases it and at the same time purifies the person from stinginess. Zakat is a right of the poor on the wealth of the rich. This institution ensures that wealth does not only circulate among the rich and leave the others destitute. Allah says in the Holy Qur’an: In order that it may not (merely) make a circuit between the wealthy among you.(59:7)

The messenger of Allah, peace and blessings of Allah be upon him, said, “Guard your wealth by paying zakat, seek cure for your sick by giving charity, and protect yourselves from affliction by supplication”. By paying zakat a person protects their wealth from calamities such as theft or fire. The messenger of Allah, peace and blessings of Allah be upon him, also said, “One who pays zakat and receives his guest with generosity, and the one who returns what is due to others, they are protected from niggardliness”.

In giving charity, there are ten benefits, five of which concern our present life and the other five concerns the hereafter. Those concerning our present life are:

1. It protects our wealth. The messenger of Allah, peace and blessings of Allah be upon 10 him, said, “Guard your wealth by paying zakat”.
2. It purifies us against niggardliness, for the blessings of Allah return to the one who pays zakat. Allah says in the Holy Qur’an: Of their goods, take alms, that so thou might purify and sanctify them. (9:103)
3. It brings happiness to the poor when they receive the zakat.
4. It brings blessings to our wealth and increases our provisions. Allah says in the Holy Qur’an: And nothing do you spend in the least (in His Cause) but He replaces it: for He is the Best of those who grant Sustenance. (34:39)
5. It relieves us from affliction of sickness, as the Messenger of Allah has said, “Relieve yourselves from your sickness by giving charity”.

As for those benefits concerning the hereafter, they are:

1. It will provide a shadow on the Day of Judgment which protects him from intense heat.
2. It will ease the accounting of one’s actions on the Day of Judgment.
3. It will add to the balance of good deeds.
4. It will elevate one’s position in Paradise.

In paying the zakat one has to fulfill the following requirements to make it proper and valid:

First, it must come from legal earnings, as Allah says in the Holy Qur’an: O ye who believe! Give of the good things which ye have (honorably) earned. (2:267)

Second, it must be given to those who deserve to be given, as Allah says in the Holy Qur’an: Alms are for the poor and the needy. (9:60)

Third, it must be given as soon as it is due. The due amount is obligatory even if there is a loss of property soon after the due date.

Forth, it must come out of the good portion of the wealth. Allah says in the Holy Qur’an: And do not aim at that which is bad to give away for charity from it. (2:267)

Fifth, it must not be given as a showoff or with brag or with expectation of getting something in return. It must be given purely for the sake of Allah, for your return will be from Him.

Sixth, it must be given in a spirit of compassion and goodwill so that the one receiving the zakat will look forward to it another time.

Seventh, it must not be given with reminders of one’s generosity or with injury (such as insult). As Allah says in the Holy Qur’an: O you who believe! Do not render in vain your charity by reminders of your generosity or by injury. (2:264)

So zakat or any charity must be given with pure intention and for the sake of Allah and without reminders of generosity or offense to the recipients. Thus, the poor will receive the zakat with dignity and happiness and will be eagerly awaiting the day when the zakat is distributed. In gratitude, they will offer prayers of blessings and supplication for the one who is giving the zakat. Paying the zakat removes stinginess and, with the supplications of the recipients, Allah blesses the wealth and multiplies it.

The Eligible to Receive Zakat #

Allah Most Gracious says in the Holy Qur’an: Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to the truth); for those in bondage and in debt; in the cause of Allah; and for the wayfarer. (9:60)

Zakat can only be distributed to those who are eligible or suitable to receive zakat. These are:

1. The poor - those who earn less than half of their daily need.
2. The needy or the destitute - those who cannot work for one reason or another or earn very little or nothing, they are worse than the poor.
3. Those who work on the distribution of zakat. In the olden days, the Imam or the ruler had a department which collected the zakat and employed people to manage the distribution of zakat. In modern days there is Bait al-Maal (Treasure House), a department in the ministry of religious affairs, which distributes zakat.
4. Unbelievers who are being encouraged to join Islam and whose services will be a help to the religion. The prophet (peace be upon him) used to give zakat to tribal leaders to attract their people into Islam.
5. A slave who wants to buy his freedom from his master.
6. A person who is in debt (which was acquired for lawful needs) and cannot pay his debt. Paying for activities which are carried out for the course of Allah (like propagation of religion).
7. A person who is away from his home and people (for legitimate reasons) and has fallen into need, even if he is well-off back home.

Punishment For Withholding Zakat #

Allah Most Gracious says on those who do not pay zakat: And those who hoard up gold and silver and spend them not in the Way of Allah, announce unto them a painful torment. (9:34)

They hoard gold and silver without paying zakat or charity, which is due on the wealth they have accumulated. Scholars have differed on the interpretation of the root word ‘alkan z’ used in the above verse. Some consider it to mean wealth which exceeds one’s needs. According to Ibn Abbas and Ibn Umar (may Allah be pleased with them) it means withholding the portion which is supposed to be given out as zakat and this is the right interpretation.

The messenger (peace be upon him) has said: ‘One who pays due zakat from his wealth has fulfilled an obligation which is upon him, and if one pays more than the due amount it is better for him’ Allah Most Gracious says in the Holy Qur’an: And those who hoard up gold and silver and spend them not in the Way of Allah, announce unto them a painful torment. On the Day when that (money, gold and silver the zakat of which has not been paid) will be heated in the Fire of Hell and with it will be branded their foreheads, their flanks, and their backs, (and it will be said unto them): “This is the treasure which you hoarded for yourselves. Now taste of what you used to hoard.” (9:34-35)

Allah further says: Those who greedily withhold what Allah has given them of His grace, should not think that it is good for them, rather it is bad for them; their necks will be chained by what they greedily withheld on the Day of Resurrection. To Allah belongs the inheritance of the heavens and earth, and Allah is All-Aware of what you do. (3:180)

On the Day of Judgement the wealth of one who does not pay zakat will turn into fire which will scorch his forehead, his side, and his back.As narrated by Abi Dharr, the messenger, peace be upon him, has said: ‘Ge who possesses camels or cattle or goats and does not pay what is due for this wealth (Zakat), on the Day of Judgement the animals which he possessed will become larger than the size of they were on earth and trample on him and gore him with their horns until the judgement of all humanity is completed’. It is said that this period is equivalent to fifty thousand years of our time on earth.

The objective of zakat in Islam is not to reduce one’s wealth, but to purify one’s soul from stinginess. After all, we are talking of a mere two and a half percent (2.5 %) of the wealth, which is only a drop in the ocean. For example, for a thousand Rials, one is required to pay only twenty-five Rials.

Wealth On Which Zakat Is Due #

The following are the categories of wealth on which zakat must be paid:

1. Money (including money which one has given out as a loan), shares and bonds, gold and silver (including women ornaments and household ornaments).
2. Trading and industry.
3. Harvest and other farm products, (for example, dates, raisins, wheat, rice).
4. Animals such as camels, cows, goats, and sheep.
5. Income from property like buildings and vehicles if they are used for commerce, such as renting.
6. Income from employment (salary) or from self-employment, such as a doctor who runs a private clinic.

Conditions On Zakat #

As mentioned earlier, Islam is built upon five principles and for each principle there are conditions attached for its right fulfillment. On zakat, Islam has prescribed specific conditions regarding who is obliged to give zakat, who is eligible to receive the zakat and how it should be given. The following are some of those conditions:

1. The person giving out zakat has to be a Muslim. If a non-Muslim reverts to Islam, he is required to pay zakat from the moment he has become a Muslim. He is not obliged to pay zakat on his wealth for the past period before he became a Muslim.
2. Zakat has to be paid on the wealth which belongs to a child who has not yet reached puberty or to a mentally ill person, although these people are not accountable to fulfil other obligations of religion such as prayers, fasting and so on.
3. Zakat has to be paid on a loan by the person who has given the loan. However, if the debtor is unable to pay back the loan (for example due to bankruptcy), the person who has given the loan is not obliged to pay the zakat, until such time he has recovered his money. He will then pay the zakat without arrears.
4. Zakat has to be paid on a wealth which is owned jointly by a group of people, even though individual shares of that wealth are less than the prescribed value on which zakat becomes obligatory.
5. The person who is giving the zakat has to do it consciously with a clear intention in his heart and mind of fulfilling a religious obligation. (This is called niyya in Arabic).
6. Zakat is due on a wealth only when that wealth has reached a prescribed value, and it is in one’s possession for a period of one year, and it is a lawful wealth. It must be noted that if one has an amount of money which is eligible for zakat and then on the last day before the due date for zakat he receives an amount of money, then the additional amount is also included in the calculation of the zakat.
7. Zakat is due on capital employed in a business and associated income. Excluded from zakat are equipment used in the business, value of the residence, private car, business and living expenses.
8. Zakat on harvest or income which comes from the harvest is paid when the harvest is gathered and not on a yearly basis. Allah says in the Holy Qur’an: Render the dues that are proper on the day that the harvest is gathered. (6:141)

Zakat On Gold, Silver, And Money #

Zakat on gold is due only if the gold is in your possession for a full year and its weight is twenty Mithqaal or more (one Mithqaal is equivalent to 4.25 grams). That is, the gold has to be 85 grams or more.

Zakat on silver is due only if the silver is in your possession for a full year and its value is 200 Dirhams or more. Ten Dirhams are equivalent to seven Mithqaal. That is, the silver has to be 140 Mithqaal or more.

Thus, Mithqaal 140 × 4.25 = 595 grams.

Or one Dirham is equivalent to 2.975 grams, therefore, Dirham 200 × 2.975 = 595 grams

If one possesses both gold and silver, but the gold has not reached the minimum amount for zakat, the appropriate value of silver shall be added to the gold to lift it to the minimum value for zakat. Likewise, if the silver has not reached the minimum value for zakat, an appropriate value of gold shall be added to the silver to lift it to the minimum value for zakat.

Zakat is also obligatory on gold or silver used by women as ornaments or used for house decoration. Aisha, the wife of the prophet, is reported to have said, “I approached the prophet (peace be upon him) with gold ornaments in my hands, and he asked me, ‘what is that?’ I replied that I wear them for you as ornaments. He said, ‘do you pay a zakat for them?’ I said no! He said, ‘beware of the hell fire’.”

Zakat on women ornaments can be paid from the gold or silver itself, or it can be given as an equivalent money value. The gold or silver may be taken to the jewelry shop where it can be weighed and the value of Zakat will be calculated at 2.5% of the total value of gold or silver at the time.

Pearls, diamonds and other types of precious stones do not attract Zakat, unless if they are used for trading, in which case they will fall under the category of Zakat on trade.

Zakat on money (cash) is paid only if the amount of money is equivalent to 85 grams of gold or more. (That is 340 Rials if the value of gold is 4 Rials per gram). The amount of money on which zakat is due includes, (a) money lent to others which you expect to be paid back, (b) money borrowed from an institution and put in a business as a capital, and (c) the value of shares and bonds at the time when zakat is paid, and any income obtained from shares and bonds (dividend) even if that income is not in one’s possession for one complete year.

The amount of zakat to be paid is two and a half percent (2 %4%) of the total wealth. Zakat can be calculated on each possession individually, or it can be calculated by adding together the value of each possession and then calculating the zakat on the total.

Example A person owns the following wealth:

1. 100 grams of 22 carats gold, whose value in the market is 4 Rials per gram
2. Cash worth 2,000 Rials
3. Cash worth 1,000 Pounds, exchange rate in the market is 600 Baizas per Pound
4. Cash worth 3,000 Dollars, exchange rate in the market is 385 Baizas per Dollar
5. Shares in the Fish Company whose current value is 10,000 Rials, and a dividend of 1,000 Rials (even if this dividend has not completed one year in his possession)
6. Money lent to somebody worth 5,000 Rials
7. Gold ornaments of various carats for his wife, whose total market value is 1,400 Rials

Calculation of zakat on the above wealth, once it has completed one year in one’s possession, is as follows:

Value of gold 100 × 4 = Rials 400

Cash = Rials 2,000

Cash in Pounds 1000 × 0.600 =Rials 600

Cash in Dollars 3000 × 0.385 =Rials 1,155

Shares plus dividend 10,000 + 1,000 =Rials 11,000

Money lent =Rials 5,000

Gold ornaments =Rials 1,400

Total =Rials 21,555

Zakat to be paid = 21,555 × 2.5% = Rials 538 and Baizas 875

Out of this, the zakat for the gold ornaments which the wife is obliged to pay will be: 1,400 × 2.5% = Rials 35

Zakat On Earnings From Employment #

Earnings from employment include salary and income from self-employment, such as when one works in his carpentry shop or a doctor working in his clinic and so on. Zakat on earnings is calculated on the balance of money left after paying for the daily living expenses and after paying for any debts or other business expenses. Zakat is due only if the cumulative balance from the earnings at the end of the year is equivalent to the value of 85 grams of gold or more, that is about 340 Rials, if the value of gold is 4 Rials per gram. It is calculated at 2 12% of the balance of money.

Example 1: Zakat on Salary

A person earns a salary of 1000 Rials per month. He spends 600 Rials on his daily living expenses and the remaining he keeps as savings.

Salary for the year 1,000 × 12 = Rials 12,000

Living expenses for the year 600 × 12 = Rials 7,200

Savings for the whole year 12,000 – 7200 = Rials 4,800

This balance amount is more than the value of 85 grams of gold and hence zakat is due on it and is calculated as follows:

4800 × 2.5% = Rials 120.

Example 2: Zakat on earnings from self-employment

A doctor runs his own private clinic and his expenses and earnings are as follows:

Income per year = Rials 2,0000

Employees salaries = Rials 4,000

Rent paid for the building = Rials 2,000

Expenses to run the clinic = Rials 1,500

Other expenses = Rials 1,000

His daily living expenses amount to Rials 500 per month.

Considering all the above, if the net profit at the end of the year is equivalent to the value of 85 grams of gold (that is about Rials 340 if the value of gold is 4 Rials per gram) or more, zakat has to be paid on this profit at the rate of 2.5%.

Income per year = Rials 20,000

Total expenses = Rials 8,500

Net profit 20,000 - 8,500 = Rials 11,500

Daily living expenses 500 × 12 = Rials 6,000

Amount due for zakat 11,500 - 6,000 = Rials 5,500

Zakat will be 5,500 × 2.5% = Rials 137.500

Zakat On Animals #

Zakat on camels, cattle, buffalos, goats, and sheep is payable only if these animals are kept for reproduction and are fed by grazing. Zakat is not payable on other animals such as horses, donkeys and others, except if they are kept for the purpose of business, in which case they will fall under the category of zakat on trade. There is no zakat on animals who are engaged in work such as in ploughing the fields or pulling bull carts and so on. Zakat is payable only if the number of camels or cattle is five or more. In the case of goats or sheep, zakat is payable only if the number of goats or sheep is forty or more. In calculating Zakat, the number of goats and sheep may be combined and the number of cattle and buffalos may be combined. When combining the animals, zakat will be taken from the animals which are in larger number. For example, in combining goats and sheep, the zakat will come from goats if the number of goats is more than the sheep. If the number of goats and sheep is the same, then zakat can be from goats or sheep.

Zakat on animals is payable when the animals are in one’s possession for a period of one year, i.e., it is payable at the end of a year. Animals which are born during the year are also included in the calculation of zakat even if they have not completed one year at the time of paying the zakat. If a group of animals is owned by more than one person, the zakat will be calculated on the whole group of animals. The animals given out for the zakat should be of average condition, neither the best of them nor the weakest of them.

Zakat On Camels And Cattle #

Zakat on camels and cattle is calculated on the same basis.

Zakat On Goats And Sheep #

Zakat On Harvest #

Zakat is payable on harvest such as dates, grapes, wheat, barley, rice and so on. Zakat is not payable on vegetables, tomatoes, cotton, sisal, unless if they are grown for business in which case the zakat falls under the category of zakat on trade.

Zakat on harvest and its income is not paid after a year, but it is paid after each harvest, even if the harvest is twice a year, provided the amount of crops meets the criteria for zakat. Allah says in the Holy Qur’an: Render the dues that are proper on the day that the harvest is gathered. (6:141)

The prophet (peace be upon him) has said: ‘For plants which are watered by rain or a spring, the amount due (zakat) is one tenth (1/10), whereas for plants which are watered by buckets (i.e., by other means) the amount due is half of one tenth (1/20)’.

Zakat on dates, grapes, wheat, barley, rice and so on is payable only if the amount harvested reaches 300 Sa’, (about 653 Kilos or 1500 Pound). In the case of dates, the zakat is calculated on the sum of the weights of individual types of dates, whereas in the case of grains, the zakat is calculated separately for each type of grain, i.e., wheat separately, rice separately and so on.

The zakat on harvest is calculated at 10% of the harvest if the fields are watered (naturally) by rain, river, or a spring. For example, for every 1000 kilos of wheat, the zakat will be 100 kilos of wheat. If the fields are watered by other means such as buckets, water tankers or by animals to carry the water, the zakat is calculated at 5% of the total harvest. For example, for every 1000 kilos of wheat, the zakat will be 50 kilos of wheat. The zakat can also be paid in money using the prevailing market price of the crops.

The crops from the fields which are consumed by the owner or given to relatives or neighbors before the harvest season are not included in the calculations for zakat.This consumption, however, must be without excess.

As mentioned earlier, zakat on vegetables, tomatoes and so on is payable if they are grown for business in which case the zakat falls under the category of zakat on trade which is 2.5% of the net income from the fields, paid on a yearly basis.

Method of calculation #

Zakat on harvest is calculated after deducting all expenses incurred such as expenses on seeds, manure, ploughing the land and so on. Also deducted from the total income are your daily living expenses and associated loans which you have taken for the farm.

Example 1 - Farmland owned by the individual

A person owns 10 acres of land on which he has cultivated wheat. He harvested 20 tons (20000 Kilos) of wheat. The market value of the wheat is Rials 200 per ton, or 200 Baizas per kilo.

Total income 200 × 20 = Rials 4,000

Running expenses on the farm = Rials 500

Loan payment = Rials 1,600

Total expenses 500 + 1,600 = Rials 2,100

Total income = Rials 4,000

Amount on which zakat is due

4,000 - 2,100 = Rials 1,900

Zakat 1,900 × 10% = Rials 190

If one wants to give the wheat as the zakat, the weight of wheat to be given out as zakat will be calculated back at Baizas 200 per kilo. Thus,

Zakat = 190 ÷ 0.200 = 950 kilos

We have seen from the above example that from the total income we deducted all expenses and loans and then taken 10% of the remaining money as the zakat to be paid. However, if we are to calculate the zakat without deducting all expenses, zakat will be calculated at 5% of the total income from the farm.

Thus; Total income = Rials 4,000

Zakat 4,000 × 5% = Rials 200

If zakat is paid in wheat;

20,000 x 5% = 1,000 kilos of wheat

As it can be seen from the above, the difference in zakat between the two methods is minimal.

Example 2 — Joint venture between the landowner and the farmer

A person owns 20 acres of land and enters into a joint venture with a farmer who will cultivate the land and share the income equally after deducting all expenses. The farmer cultivates the land to produce cotton and grass (for cattle feed).

Total income from cotton is Rials 3,500 and from cattle feed is Rials 1,500.

Expenses on cotton cultivation are Rials 900 and on cattle feed cultivation are Rials 350. Expenses on feeding the farm animals are Rials 1,000. Loan amount is Rials 600.

The zakat on the above example is calculated as follows:

Income from cotton = Rials 3,500

Income from cattle feed = Rials 1,500

Total income 3,500+ 1,500 = Rials 5,000

Expenses on cotton and cattle feed cultivation = Rials 1,250

Expenses on feeding farm animals = Rials 1,000

Loan =Rials 600

Total expenses 1250+1000+600 = Rials 2,850

Amount on which zakat is due

5,000 - 2,850 = Rials 2,150

Zakat 2,150 × 2.5% = Rials 53.750

Hence, each person in the joint venture will pay Rials 26.875 on zakat.

Example 3 - Rented farm land

A person rented 10 acres of land to a farmer at a yearly rent of Rials 600. The farmer cultivates vegetables on the land.

Income from selling the vegetables = Rials 5,000

Vegetables consumed by the farmer = Rials 300

Expenses on the farm and cultivation = Rials 1200

Debt associated with the farm owed by the farmer = Rials 400

Debt owed by the landowner   = Rials 150

Expenses on the water pump   = Rials 500

The zakat to be paid by the landowner is calculated as follows:

Income from the rent = Rials 600

Loan = Rials 150

Amount on which zakat is due 600-150 = Rials 450

Zakat 450 × 2.5% = Rials 11.250

The zakat to be paid by the farmer is calculated as follows:

Total income from the farm 5,000 + 300 = Rials 5,300

Rent for the land = Rials 600

Expenses on the farm and cultivation = Rials 1,200

Debt associated with the farm = Rials 400

Total expenses 600 + 1,200 + 400 = Rials 2,200

Amount on which zakat is due 5,300 - 2,200 = Rials 3,100

Zakat 31,00 × 2.5% = Rials 77.500

Zakat On Trading And Industry #

In trading, the zakat is due on stock, goods, and capital employed in buying and selling. There is no zakat on equipment used in conducting the trade, such as vehicles, tools, or animals used for carrying goods.

In industry the zakat is due on the profits made from the factory products, whether the products are final pro ducts such as shoes or canned fish, or the products are feedstock or raw materials for other industries, for example, chemicals which are used to produce medicines by other factories.

Zakat is also due on trading in shares and bonds and in money changing business.

The zakat is due if the income is equal or more than the equivalent value of 85 grams of gold, and if the income is in one’s possession for a year. The zakat is calculated at 2.5%.

Method Of Calculation #

In trade, the value of goods and stock in the shop, stores and in the farm (if one is trading in cattle, for example) is calculated based on the current market value. If this total value is equal or more than the equivalent value of 85 grams of gold, the zakat will be calculated at 2.5% of the total value.

In industry, the zakat is on the net profit made from selling the products. All expenses in running the factory, such as cost of machinery, raw materials, salaries and so no, are deducted from the gross income to get the net income. If the net income is equal or more than the equivalent value of 85 grams of gold, the zakat will be calculated at 2.5% of the net income

The above calculation of income is, in fact, the normal exercise done by big businesses at the end of the year to calculate the financial status of the business (balance sheet).

##Zakat On Buildings And Other Properties

Zakat is due on income generated from (a) a property such as a building which is rented, (b) vehicles which are used for carrying passengers or for carrying goods, (c) cattle which are kept for trade or for selling their products such as milk, (d) chicken kept for trade or selling the eggs, and so on.

The zakat is calculated on total income generated during the year. The zakat is due only if this total income is equal or more than the equivalent value of 85 grams of gold.

Method of Calculation #

Example 1 - Rented buildings

A block of flats was constructed at a cost of Rials 100,000. The total income generated from renting the flats is Rials 1200 per month. The following are the running expenses on the building:

Monthly salary for the house guard = Rials 80

Maintenance cost for the whole year = Rials 500

Yearly electricity charges for staircase lights = Rials 140

Municipality charges are Rials 50 per year.

The zakat for this example will be calculated as follows:

Yearly income 12 × 1,200 = Rials 14,400

Salary for the house guard 12 × 80 = Rials 960

Maintenance expenses = Rials 500

Electricity charges = Rials 140

Municipality charges per year = Rials 50

Total expenses = Rials 1,650

Net income 14,400 - 1,650 = Rials 12,750

As the owner of the building has another source of income for his living, his living expenses are not deducted from the net income. The net income is more than the equivalent value of 85 grams of gold, and hence the zakat is payable on the income.

Zakat= 12,750 × 2.5% = Rials 318.750

Example 2: Passenger cars

A person owns a bus worth Rials 10,000 which he uses to carry passengers. He has a debt of Rials 800. His expenses and income for the whole year are as follows:

Driver’s salary = Rials 1,600

Petrol = Rials 750

Bus license = Rials 50

Maintenance charges = Rials 400

Total expenses = Rials 2,800

Total income = Rials 5,400

Net income 5,400 - 2,800 = Rials 2,600

Debt = Rials 800

Amount on which zakat is due 2,600-800 = Rials 1,800

Zakat = 1,800 × 2.5% = Rials 45

Example 3: Dairy farming

A person runs a dairy farm whose total property value is Rials 8,000 which includes cows worth Rials 4000 and machinery worth Rials 4,000. His income from milk and other dairy products is Rials 5,000. He also sold manure at Rials 1000. He has no debt. The following are his expenses and income for the year.

Expenses on animal feed = Rials 2,000

Wages for the workers = Rials 1,000

Rent for the land = Rials 400

Miscellaneous expenses = Rials 300

Total expenses = Rials 3,700

Total income = Rials 6,000

Net income 6,000-37,00 = Rials 2,300

Zakat= 2,300 × 2.5% = Rials 57.500

Source of the Chapter #

1- Zakat Obligatory Charity Its rules and regulations, written by Sheikh Nassir bin Issa bin Said Al-Kindy, Translated into English by Hafidh bin Muhammad Al-Kindy, Islamic Information Center Sultan Qaboos Grand Mosque, First Edition 2007.