One extremely important principle in Islam involves that everything belongs to Allah. This means that wealth or money that humans hold is in trust. In Islam it is believed that possessions are therefore purified when one sets aside a part of their wealth for people who really need it such as orphaned children, the needy and the poor.
The term Zakat also named Zakah, forms part of the Five Pillars Of Islam, which is defined as welfare contributions for deprived and poor people. Payments that involve Zakat are an obligation for every mature as well as sane Muslim, especially when economic activities have resulted in an increase in their overall wealth.
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Zakat is used to purify the individual’s personal possessions, but more importantly it purifies the individual’s heart from greed and selfishness. This act is said to additionally purify the hearts of the recipients from any jealousy, envy, uneasiness and hatred and encourages warm wishes and goodwill for the individuals who make these contributions.
How Zakat Is Distributed?
The donations received from Zakat are split between eight groups of individuals. The Qur’an stipulates that Zakat is intended for:
•The individuals who collect and administer these donations
•Those in bondage or debt
How Is Zakat Calculated?
It is obligatory for individuals to pay an amount of 2.5% of their wealth of the money they have made in a lunar year. The farmers that own land and harvest crops are expected to pay between 5% and 10% of the worth of their harvest, dependent on the irrigation type.
How Do Businesses Pay Zakat?
It is recommended that businessmen that earn a specific amount from their business, the savings after handling the needs of his business and family as well as any expenses, should amount to 2.5% to Zakat. In addition, businessmen are required to pay out Zakat from the commodities in the store. This necessitates evaluating purchasing power related to the commodity and to then pay 2.5% of this specific amount.
Why Zakat Is Important During Ramadan?
The majority of Muslims decide to give their Zakat donations in Ramadan, due to the fact that it is believed that the rewards are greater at this time. However, it is an obligation to pay what is known as Zakat Al Fitr that involves that the fasting Muslims must give money or food to charities. The money or the food is equal to a single meal for one individual. The head of a house will pay forth this donation for every person in his household. If the head of a household is also responsible for his or his wife’s parents he will need to pay an amount for these individuals.
Frequently Asked Questions About Zakat
How Much Zakah Is Expected?
The amounts for Zakat are broken down into the following:
•2.5% based on the annual savings of each adult Muslim
•5% for agriculture that is handled by farmers who irrigate and plant their crops from their personal money
•At harvest time farmers are expected to pay forth another 5% from their total crop
•10% on the farmers products when their crops are irrigated from natural rain
•20% Zakat is expected from resources that involve precious metals such as silver or gold and oil that is found on the land that the individual owns
Is Zakat Payable For An Individuals Car Or House?
Zakat is not payable for individuals who only own a single home. However, if Muslims own second or third properties that are viewed as an investment purpose, this is viewed as Zakatable. 2.5% is expected from the savings from these properties. This amount excludes what was spent on insurance, property taxes and maintenance.
This same principle applies to cars. If the individual is renting one of their vehicles out to another individual, this is viewed as a type of business entity that should be Zakatable.
Are Businesses Expected To Pay Zakat?
When it comes to a Muslim business it must first be Halal. Below are three opinions when it comes to businesses and Zakat:
•The businessman that has first taken care of business expenses and his family and is still left with savings, is expected to pay an amount of 2.5% from these savings.
•Businessmen are expected to also pay Zakah from the commodities in their stores. This involves an evaluation of purchasing power for these commodities and to then pay 2.5% of these amounts.
•Everything comes from Allah and also eventually is given back to Allah. This means that the more that is given from these commodities the more favorable for the businessman. This means that the amount given can therefor exceed the 2.5%.
Is Zakat Paid Once A Year Only?
In the years gone by, Muslims used to pay Zakat each day opposed to paying a bulk amount every year. There are various scholars of the Muslim faith that advise Zakat should be planned for in advance as the individual may die and the inheritors may not be able to pay out the Zakat owed from the deceased.
If a Muslim decides to pay out Zakat on a daily basis, it is advisable to give a specified amount to one out of the 8 categories mentioned earlier. However, nobody but Allah and the individual should know about these donations as some recipients may feel that it is insulting or demeaning.