Shuaib-ud-Din, Marghoob Ahmed Quraishi, and Sumaiyah. Bintulislam. Zakat-ul-Fitr:Special charity paid to the needy on or before the day of. Eid-ul-Fitr, which is the first Reliance of the Traveler: A Classical Manual of Islamic. Sacred Law.
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Copyright © by The Central Zakat Committee (CZC) of The Council of Islamic Organizations of Greater Chicago (CIOGC) Acknowledgements This booklet, fiThe Institution of Zakatfl, has been developed based on the book titled, fiThe Institution of Zakat ŒA Do It Yourself Zakat Guidefl, authored by Mohammad Mazhar Hussaini, with further input from The Central Zakat Committee members. Originally, it was reviewed by Dr. Muzammil Siddiqui, Dr. Mohammad Noor Abdullah, and Dr. Mohammad Omar Farooq, and edited by Maulana Khaja Shuaib-ud-Din, Marghoob Ahmed Quraishi, and Sumaiyah Bintulislam. The answers to the fiFrequently Asked Questionsfl, included in this booklet are being reviewed by Maulana Abdullah Saleem and Sheikh Jamal Saeed. First Edition, 2005 Publisher: The Central Zakat Committee The Council of Islamic Organizations of Greater Chicago (CIOGC) 231 South State Street, Suite 300 Chicago, Illinois 60604 (USA) Phone: 1 (800) 678-0753 Website: www.zakatchicago.com Email: zakat@ciogc.org
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THE INSTITUTION OF ZAKAT (An Obligation and an Opportunity) Table of Contents Foreword ––––– ii Key Terms ––––– iv Introduction ––––– 1 Definition of Zakat ––––– 2 Institution of Zakat ––––– 2 Zakat-ul-Maal (Zakat on Wealth) ––––– 3 Purpose of Zakat ––––– 3 Rules of Zakat Payment ––––– 3 Criteria of Zakat Payment ––––– 3 Validity of Zakat Payment ––––– 4 Rules of Zakat Calculation ––––– 4 Zakatability of the Possessions ––––– 4 Zakatable Possessions ––––– 4 Non-Zakatable Possessions ––––– 6 Nisab Œ The Prescribed Limit ––––– 7 Owner of Nisab ––––– 8 Zakatability of Items ––––– 9 Zakat Rate ––––– 10 Due Date of Zakat ––––– 11 Zakat Calculation Form ––––– 12 Rules of Distributing Zakat ––––– 13 Recipients of Zakat ––––– 13 Distribution of Zakat ––––– 15 Deserving Recipients ––––– 15 Transfer of Ownership ––––– 15 Mode of Zakat payment ––––– 15 Locality of Zakat Payment ––––– 16 Zakat-ul-Fitr or Sadaqat-ul-Fitr ––––– 16 Sadaqah Nafilah or Zakat-ul-Tatawwu` ––––– 16 Etiquette of Giving Sadaqah ––––– 17 Frequently asked Questions ––––– 18 References ––––– 23 Recommended Reading ––––– 23
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The Institution of Zakat ii FOREWORD Zakat is one of the five fundamental obligations of Islam. It is an obligatory form of worship (Ibadah) prescribed by Allah Subhanahu wa Ta`ala. Allah commanded in the Qur™an: fi– so establish Salat and give Zakat, and hold fast to Allah –fl (Al-Qur™an 22:78) Zakat is a duty from Allah similar to the duty of Salat (Al-Qur™an 2:43, 110, 177, 277; 4:162; 9:103; 24:56; 73:20; 98:5). For establishing Salat, the Muslim community organizes a place of worship (Masjid / Islamic Center) to offer Salat in congregation. Similarly, the Muslim community is obligated to establish the institution of Zakat in order to collect Zakat from rich Muslims of the community and distribute it among the needy ones. The establishment of the institution of Zakat is a function of an Islamic State. In the absence of an Islamic State, various Islamic organizations have taken it upon themselves voluntarily to collect and disburse the Zakat in the communities. While these efforts deserve appreciation, the benefits of Zakat have not been fully realized due to a lack of centralization and coordination. Upon the recommendation of the member organizations of the Council of Islamic Organizations of Greater Chicago (CIOGC), a Central Zakat Committee (CZC) has been organized to coordinate the Zakat collection and distribution efforts in the Metropolitan Chicago area. The mission of the Central Zakat Committee is to make Zakat a living institution in order to realize its spiritual and socio-economic impact on Muslim individuals, businesses, as well as Muslim communities in the Greater Chicago area. Indeed, it has a potential for developing enormous resources for the community. The Central Zakat Committee is an effort to institutionalize Zakat through: – Organized promotion, collection, and distribution of Zakat, – Organized assistance to the poor and needy of the community. – Pooling of individual Zakat payments for major community projects, – Supporting high priority community needs permissible through Zakat.
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The Institution of Zakat iii The Central Zakat Committee (CZC) humbly presents this simplified document titled, fiThe Institution of Zakatfl in order to make Muslims aware of the significance, need, system, rules, and procedures of the duty of Zakat. In compiling this booklet care has been taken to deduce rulings directly from the Qur’an and Sunnah. While respecting the differences of opinion among various Muslim jurists (Fuqaha), the valid opinions that are more appropriate to the present situation in North America have been chosen to answer the frequently asked questions. Other significant opinions have also been presented for reference. The contents of this booklet can be accessed from The Central Zakat Committee™s website: www.zakatchicago.com The Central Zakat Committee (CZC) The Council of Islamic Organizations of Greater Chicago (CIOGC)
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The Institution of Zakat iv KEY TERMS The following are definitions of certain key terms necessary to explain the institution of Zakat. Readers should familiarize themselves with these important key terms. Basic Needs: (Al-Hajat al-Saliyah) implies the necessities of life required for a decent livelihood for a Muslim in his/her environment. It includes food, clothing, shelter, health care, transportation, household utensils, tools and equipment of trade or profession, etc. Debt: To owe; amount owed. For calculating Zakat, the status of one’s debt is very important. Debtor: An individual who is in debt to an extent that after paying his debt, he/she would not have any possession left above and over the `Nisab’. Such a debtor is not required to pay Zakat. Instead he/she should try to pay his/her debt first. Fard: The Qur’anic term for obligatory duty. Examples of `Faraid’ (plural of `Fard’) are Salat (worship prayers), Zakat (charity), Saum (Fasting in the month of Ramadan), Hajj (pilgrimage to Makkah), etc. A Muslim must fulfill these obligatory duties to qualify as a practicing believer of Islam. Ibadah: The Qur’anic term for worship of Allah. When a Muslim does anything according to the way Allah has asked him/her to do; it is considered `Ibadah’. Examples of the prescribed rituals of Ibadah are Salat, Zakat, Saum, Hajj, etc. Khums: (literally one fifth): The Zakat for fortuitous fortune (Rikaz) is termed as `Khums’. Khums becomes obligatory as soon as the fortuitous fortune (equal to or exceeding the amount of Nisab) is possessed. One-fifth (20%) of the total gain must be paid immediately after possession (Q 8:41). Nisab: The minimum amount of wealth owned by an individual for one year that obligates the individual to pay Zakat. This minimum amount of wealth is separately defined for each category of wealth. The Shari’ah has prescribed a specified `Nisab’ for each category of wealth or possession. Zakat becomes due when the wealth and/or possessions of an individual exceed the limit of Nisab.
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The Institution of Zakat 1 INTRODUCTION Charity is the provision of help or relief to the poor. Many people in the world practice different kinds of charity for different reasons. Charity has been a part of the universal religious tradition of mankind. Throughout human history all religions and older civilizations have recommended some form of charity to their respective followers. Charity has found acceptance in all religious systems although its forms and motives vary with different creeds and nationalities. Following the previous revelations, the glorious Qur™an, reaffirms the continuation of charity as divine ordinance. Allah decrees in the Qur™an: fiAnd they are ordained nothing else than to serve Allah, keeping religion pure to Him, as men by nature upright and to establish Salat and to pay the Zakat. That is true religion.fl (Al-Qur™an 98:5) Charity has been given a very broad meaning in Islam. Any benefit done to any creature; economic, moral, spiritual, or consolatory, is considered charity. Every good deed, therefore, is a charity. Islam has institutionalized charity as a regular exercise of benevolence, good will, and affection. Sadaqah is an Arabic term widely used to cover all kinds of charity. Literally `Sadaqah™ means `truth™. It signifies a charitable deed. However, Muslims are commanded to give compulsory charity with determined purpose and established rules. This compulsory charity is referred to as `Zakat™. The term `Zakat™ and `Sadaqah™ are often used interchangeably in the Qur™an and the Sunnah. Zakat, however, denotes obligatory charity and Sadaqah implies voluntary charity. For easy understanding, the Sadaqat may be classified into two categories: (A) Sadaqah Wajibah (Obligatory Charity) (B) Sadaqah Nafilah (Voluntary Charity)
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The Institution of Zakat 2 (A) Sadaqah Wajibah (Obligatory Charity) Sadaqah Wajibah is an obligatory charity. There are two kinds of obligatory charity. (1) Zakat-ul-Maal (Zakat on the wealth) (2) Zakat-ul-Fitr or Sadaqat-ul-Fitr (Zakat on the individual) (B) Sadaqah Nafilah (Voluntary Charity) It is recommended that every Muslim pay Sadaqah (voluntary charity) in addition to the obligatory Zakat-ul-Maal and Zakat-ul-Fitr. The socio-economic benefits from this avenue are directly proportional to the generosity of the Muslims. Sadaqah contribution can be utilized in various good causes locally as well as world over. DEFINITION OF ZAKAT The literal meaning of the word fiZakatfl is cleansing and growth. In keeping with these qualities, Allah has prescribed Zakat as an obligatory charity, as a duty to Allah, upon every wealthy individual. Wealthy individual is defined as one who is in possession of a minimum amount of wealth called Nisab for an entire lunar year. This charity is prescribed in order to cleanse the individual‚s wealth, heart, and by extension the society in general, of the baser characteristics of miserliness, selfishness, greed and materialism and replace them with higher qualities of generosity, love, care, and mutual help. INSTITUTION OF ZAKAT Zakat is a meaningful institution with a definite religio-socio-economic purpose. It has its established rules and procedures, structure, standard, and specific functions. Muslims all over the world practice Zakat as an obligatory duty of their religion. While the payment of Zakat is an individual duty, the collection and distribution of Zakat is a collective obligation. Islam has organized the institution of Zakat with a spiritual approach leading to the socio-economic benefit of mankind. fiAllah deprives usurious gain of all blessings, whereas He blesses charitable deeds (Sadaqat) with manifold increase.fl (Al-Qur™an 2:276)
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The Institution of Zakat 3 ZAKAT-UL-MAAL (ZAKAT ON WEALTH) Zakat-ul-Maal is the obligatory charity paid by an individual to the needy. It is obligatory on an individual who possesses wealth equal to or above a minimum amount called Nisab for an entire lunar year. For the purpose of calculating Zakat, different categories of wealth are defined. In terms of Islamic jurisprudence (Fiqh), Zakat is an obligatory duty (Fard) on every Muslim and Muslimah possessing wealth equal to or exceeding the prescribed amount of Nisab. It is a prescribed welfare-contribution from one™s stored wealth. It is the right of Allah on a Muslim’s wealth. Paying Zakat-ul-Maal is the responsibility of the owner. If one fails to carry out the obligation of Zakat, one is a sinner, consequently incurring Allah’s displeasure, even His punishment PURPOSE OF ZAKAT Paying Zakat is an act that purifies one’s wealth. It is a divinely prescribed method of cleansing and purifying a person™s heart and soul from all kinds of worldly greed and material love. It instills love of Allah, making a person an obedient, sincere, and grateful servant of Allah. The institution of Zakat-ul-Maal embodies a viable system established to assist in the process of growth and development of the Muslim community. It takes care of the basic needs of the poor in the community. It is considered the right of the poor on the wealth of the rich, thereby establishing mutual rights and responsibilities between them. It contributes toward a fair and just distribution and circulation of wealth in a society. RULES OF ZAKAT PAYMENT Criteria for Zakat Payment: As a Muslim, Zakat becomes obligatory (Fard) on you when you meet the following four conditions: 1. You are the `owner of Nisab’. 2. You are meeting the basic needs of yourself and your family, 3. You are not an insolvent debtor ( i.e., you are meeting the financial obligations of your debt),
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The Institution of Zakat 4 4. You have possessed the wealth/livestock for one complete lunar year (Haul), or raised and harvested crop, or gained the ownership of fortuitous fortune. If any one of the above four conditions is not met, the payment of Zakat is not obligatory. However, once all the above four conditions are met, one is required to pay Zakat on all the Zakatable items that one owns. The guardian of a child, an orphan, or a mentally retarded person is required to pay Zakat on their behalf from their property if it is at or above Nisab. Zakat is also taken from the estate of a deceased person if he/she died before paying the Zakat that was due. Validity of Zakat Payment: The obligation of Zakat is considered fully discharged when you meet the following four essential conditions: 1. You have made the intention (Niyyah) of paying Zakat. 2. You have assessed your due Zakat correctly. 3. You have paid Zakat only to eligible recipients of Zakat to the best of your knowledge. 4. The recipient of Zakat is made the rightful owner of the paid Zakat. Once all four of the above conditions are fulfilled, the obligatory duty (Fard) of Zakat is considered to have been carried out. RULES OF CALCULATING ZAKAT Zakatability of the Possessions: The items of one™s possessions can be classified into two groups: ¨ Zakatable Possessions (Table I) ¨ Non-Zakatable Possessions (Table II) Zakatable Possessions: An item is Zakatable when it meets the following four conditions: 1. The item is not intended for one™s personal or household use and/or consumption 2. The item is in one™s complete ownership. (A person is considered a complete owner of a property when it is in his lawful possession and he is able to dispose of it at his will).
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