After reading the first two lines of this submission by Mr. Irshad Mahmood about “rethinking intellectually about Zakat in modern times” I was intrigued that he may have a simpler method of calculating zakaat in the 21st century. But it turned out he detailed the same method, which, if you followed exactly, would need an accountant to complete. But with Ramadan approaching, it certainly was a very relevant topic to discuss, at least amongst those who do believe in zakat. Even if you don’t read the abbreviated – by 80% – article below, just look at the zakat calculator excel spreadsheet at the end. Is calculating zakat supposed to be this complicated? The practice of Islam is not supposed to cause unnecessary hardships; there are alternatives when you cannot fast because of illness, travel or pregnancy; there are alternatives when there is no water for ablutions. Can’t there be a simpler and more practical alternative to the excel spreadsheet below? Hopefully someone has the answers. Shoeb Amin, EOM
AsSalaam O Alaikum (Peace be always with you. AMEEN.)
ZAKAAT – USHR – SADAQAH
by Irshad Mahmood – Director, Siraat-al-Mustaqeem Dawah Centre
————————-
In modern time we need to rethink intellectually about Zakaat on wealth,
where work system is changed where many human are working in industries
instead of lands. With the invention of modern systems, more and more
Robots and Machines are working and human are being laid off. Work
system is changed. Zakaat must be taken by Government to distribute
among the poor/needy with full accountability, (Ref:
Al_Quraan_009.102-104). If any government is taking TAX then Net Zakaat
to be paid will be differences (Zakaat – Tax), if TAX is less than
Zakaat. If one is willing to pay more must go ahead to please Allah
more. Zakaat Rates could be as follows:
(a) 2.5% annually on Wealth/Savings/unused items including clothing (not
on regular use)/jewelries (not on regular use)/properties on which one
is not collecting rent or not on businesses properties.
(b) 5 % on all items which are produced by the interaction of labour and
capital both at the time of production.
(c) 10 % on items which are produced either by labour or capital BUT not
both at the time of production.
(d) 20 % on items which are produced neither as a result of capital nor
labour at the time of production.
Nisaab:
The statutory exemptions in wealth, livestock and agricultural
production are fixed as:
Wealth: 87 grams (7.5 tolas) of gold / 612 grams (52.5 tolas) of silver
or its equivalent in total (1 tola = 11.5 grams).
Production: 1119 kilograms (5 Wasaqs) of dates or their equivalent.
Livestock: 5 camels / 30 cows / 40 goats or their equivalent.
t
IF ONE GETS PRODUCE OF GARDENS/FARM PAY THE DUE:
And He it is Who produces gardens, trellised and un-trellised, and palms
and seed-produce of which the fruits are of various sorts, and olives
and pomegranates, like and unlike; eat of its fruit when it bears fruit,
and PAY THE DUE OF IT ON THE DAY OF ITS REAPING, and do not act
extravagantly; surely He does not love the extravagant,
(Al_Quraan_006.141).
O you who believe! spend (benevolently) of the GOOD THINGS that you earn
and or what We have brought forth for you OUT OF THE EARTH, and do not
aim at what is bad that you may spend (in alms) of it, while you would
not take it yourselves (unless you have its price lowered/reduced), and
know that Allah is Self-sufficient, Praiseworthy, (Al_Quraan_002.267).
HOW MUCH TO SPEND:
….. And they ask you as to what they should spend. Say: THAT WHICH IS
SUPERFLUOUS (IN EXCESS). Thus does Allah make clear to you the
communications that you may ponder, (Al_Quraan_002.219).
RASOOL ALLAH (PEACE-BE-UPON-HIM) USED TO COLLECT ZAKAAT TO PAY THE
NEEDY:
And of them there are those who blame you with respect to the alms; so
if they are given from it they are pleased, and if they are not given
from it, lo! They are full of rage. And if they were content with what
Allah and His Messenger gave them, and had said: Allah is sufficient for
us; Allah will soon give us (more) out of His grace and His Messenger
too; surely to Allah do we make our petition, (Al_Quraan_009.058-059).
And others have confessed their faults, they have mingled a good deed
and an evil one; may be Allah will turn to them (mercifully); surely
Allah is Forgiving, Merciful. TAKE ALMS OUT OF THEIR PROPERTY, YOU WOULD
CLEANSE THEM AND PURIFY THEM THEREBY, AND PRAY FOR THEM; surely your
prayer is a relief to them; and Allah is Hearing, Knowing. Do they not
know that Allah accepts repentance from His servants and takes the alms,
and that Allah is the Oft-returning (to mercy), the Merciful?
(Al_Quraan_009.102-104).
TRUE ISLAAMIC GOVERNMENT HAS TO COLLECT ALMS (TAX) FROM THE RICH TO GIVE
CHARITY TO THE NEEDY ETC. IN NON-ISLAAMIC COUNTRY WHERE THERE IS NO
SOCIAL SERVICES, IF THERE IS SOME LOCAL MUSLIM COMMUNITY PERFORMING THIS
DUTY AND KEEPING ALL THE RECORDS FOR CHECK AND BALANCES, THEN THEY CAN
COLLECT OTHERWISE, AS A THIRD OPTION YOU CAN DIRECTLY PAY THE NEEDY ETC.
TRUE ISLAAMIC GOVERNMENT MUST BE ORGANIZED TO HAVE GOOD KNOWLEDGE OF THE
NEEDY ETC. ALL IN ONE NATIONAL ID CARD IS A GOOD OPTION FOR THE CHECK
AND BALANCES OF ALL, THEY MUST LEARN PRESENT TOOLS AVAILABLE AND AROUND
THE GLOBE AND IMPROVE IT WHERE EVER IT IS POSSIBLE:
Take alms out of their property, you would cleanse them and purify them
thereby, and pray for them; surely your prayer is a relief to them; and
Allah is Hearing, Knowing, (Al_Quraan_009.103).
TRUE ISLAAMIC GOVERNMENT NEED TO HAVE THE FOLLOWING:
There must be an all in one single Identity Card to know who is real
needy and there must be checks and balances for this purpose.
There must be fully functional Price Controlled Utility Stores available
to provide Basic Foods and other Basic Necessities to their low income
citizens.
Educate their citizens, which include kids for FREE. Schools, Colleges
and Universities of International Standards need huge amount of funds,
which may not be possible without Collective Efforts. Without Effective
Communication, Islaamic Government may not be able to effectively
educate their own citizens.
There must be Health Centers & Hospitals with Free Medicine to look
after the Health of their citizens.
Low Rental Housing Scheme based on Family Income so no one is sleeping
on the streets. It is Islaamic Government’s duty to make sure no one
is in Poverty, having hardship and sleeping on the street.
Security of Citizens: For all the above reasons as well, True Islaamic
Government may need trillions of dollars of budget per year, so they
need Perfect Security with Perfect Defense from Land, Sea and Space as
well. In the past many states failed to protect their citizens due to
very tiny budgets and no or very little future development programs.
REMEMBER:
ZAKAAT CALCULATOR: Zakatcalc.xls
| Zakat Calculator Ver -2005 | |||||
| (Use Only YELLOW cells to fill Values. Please read the Summary for details, before filling this) | |||||
| Weight in Grams | Price/Gm | Estimated Value | Zakat Payable | ||
| 1 | ZAKAT ON GOLD (2.5%) | ||||
| 1a | 24 Carat Gold/Jewelry | – | |||
| 1b | 22 Carat Gold/Jewelery | – | |||
| 1c | 18 Carat Gold/Jewelry | – | |||
| 1d | Other Gold Valuables. (Pls insert the Current Estimated Value) | – | |||
| 2 | ZAKAT ON PRECIOUS STONES (2.5%) | (Contentious subject. Refer Notes. Don’t Calculate if you disagree or are uncomfortable.) | |||
| Calculate the nett Market Value of the Precious stones like Diamonds, Rubies, Etc. and add them to the Estimated Value Column | – | ||||
| 3 | ZAKAT ON SILVER (2.5%) | ||||
| Include Household Silver Utensils, Artefacts, and Jewelery. For Utensils, usually the silver is 90% pure so take 90% of the total weight | – | – | |||
| 4 | ZAKAT ON CASH IN HAND /BANK (2.5%) | Actual Value | |||
| 4a | Cash in Hand | – | |||
| 4b | Cash in Bank in Savings Accounts | – | |||
| 4c | Cash in Bank in Current Accounts | – | |||
| 4d | Cash held in Fixed Deposits | – | |||
| 5 | ZAKAT ON LOANS / INVESTMENTS/ FUNDS/ SHARES, ETC (2.5%) | Actual Value | |||
| 5a | Loans Receivable from Friends and Relatives | – | |||
| 5b | Investment in Govt Bonds | – | |||
| 5c | Provident Fund Contribution to date. | – | |||
| 5d | Insurance Premiums including bonus up to date | – | |||
| 5e | Value of Shares (stocks) including Dividends. Take their market value on the date of calculation | – | |||
| 5f | Government Security Deposits, ADRs, etc | – | |||
| 5g | Investment in Private Chits, Funds, etc | – | |||
| 5f | Other Sources of Wealth | – | |||
| 6 | ZAKAT ON LANDED PROPERTY (2.5%) | Estimate Value | |||
| 6a | Landed Property held as an Investment / Business (Estimate the current Maket Value) | – | |||
| 6b | Zakat on Rentals Coming from Property (After Deducting for all expenses) | – | |||
| 7 | ZAKAT ON BUSINESS (2.5%) ———- | (STOCK-IN-TRADE) | |||
| 7a | Value of Saleable Stock | ||||
| 7b | Value of Damaged / Dead Stock | ||||
| 7c | Amount Receivable from Credit Sales | ||||
| 7d | LESS: Amount Payable to Suppliers (Credit taken from suppliers for stocking goods) | ||||
| 7e | LESS: Bad Debts | ||||
| TOTAL VALUE OF STOCK ( 7a+7b+7C-7d-7e) | – | ||||
| 8 | ZAKAT ON SHARE IN PARTNERSHIP FIRMS (2.5%) | ||||
| 8a | Capital Balance as per Last balance Sheet | ||||
| 8b | Loans Advanced by you to the Firm as of Date | ||||
| 8c | LESS: Withdrawals made by you during the current Year. | ||||
| 8d | Accumulated Profit from the date of Balance Sheet to this Date (Estimate the Profit Value as it is difficult to get exact figures in the middle of Accounting Year) | ||||
| NETT TOTAL WORTH CALCULATED | – | ||||
| 9 | ZAKAT ON AGRICULTURAL PRODUCE (10%, 7.5%, 5%) | Value of Produce | |||
| 9a | Produce Dependent on Rain Water – @ 10% of product (crop) in Value or Kind | – | |||
| 9b | Produce totally dependent on Artificial Irrigation like Canal, Tank, Borewell, etc. @ 5% of Produce (crop) in Value or in Kind | – | |||
| 9c | Produce dependent Partially on Rain Water and Partially on Artificial Irrigation @ 7.5% of the produce Value or in Kind | – | |||
| 10 | ZAKAT ON ANIMALS & POULTRY & FISH FARMING | Total Value | |||
| Animals/ Birds more than 6 months Old – @ 1 Animal or Bird PER 40 either in Kind or Value thereof. | – | ||||
| 11 | GENERAL LIABILITIES – You need to deduct your direct Payables or Liabilities which have not been deducted earlier – Usage of the loan should have been on Zakatable Wealth only. | ||||
| 11a | Loans taken from from Friends / Relatives | ||||
| 11b | Loans Taken from Banks / Institutions | ||||
| 11c | Income Tax / Wealth Tax Payable | ||||
| TOTAL LIABILITIES | |||||
| TOTAL ZAKAT PAYABLE | |||||
| IMPORTANT: PLEASE READ BELOW SUMMARY FOR INSTRUCTIONS & NOTES: | |||||
| Dear Brothers & Sisters, | |||||
| Alhamdulillah, the month of Ramadhan has been bestowed upon us by Allah. ZAKAT is one of the five fundamental pillars of Islam, mandatory on all muslims who are of eligible wealth. Zakat is due from and payable by a person on his wealth (and not his income), which has remained with him/her for one Islamic year. | |||||
| It is difficult to calculate the completion of one year on each item of wealth, because purchase dates may vary. To overcome this difficulty, a practical method is to fix a date (e.g. 1st of Ramadhan), compute your total wealth on that date and calculate Zakat, thereon. | |||||
| The attached spreadsheet is a humble attempt at making the calculation process simple and consolidated, for all brothers and sisters who are fortunate to be worthy of paying Zakat. If there are any errors, its purely due to my incomprehension and may be brought to my notice immdtly by email at ajameel@yahoo.com. This is also available online at http://www.geocities.com/ajameel/zakat.html .Please remember me in your supplications and may Allah give us all the rewards of both worlds. Aameen. | |||||
| A lot of brothers have asked me what Madhab do I belong and whether this covers Shias, Barelvis, Jaffris, Bohras and other sects. All I can say here is that let us rise above all these covert little shells we have built around us. We are Muslims first and if one is sincere, he will rise above all this secterianism, read the Quran himself and get the facts firsthand. The practical life of our Prophet SAS is there to be followed and practiced. And pray to Allah that he show us and keep us on the right path. Aaameen. | |||||
| Yours Brother in Islam, Arif Jameel. | |||||
| Details of Each Section to be used in conjunction with the Calculation Spreadsheet. | |||||
| Zakat on Pure Gold and Gold Jewellery | |||||
| Zakat should be calculated at 2.5% of the market value as on the date of valuation (In our case we consider 1st of Ramadhan). Most Ulema favour the Market Value prevailing as on the date of Calculation and not the purchase price. | |||||
| Zakat on Precious and Semi-Precious Stones | |||||
| There is considerable contention on whether these are to be considered for valuation. In my humble opinion if they have a value, then they calculate towards your wealth, and it is on the wealth that Zakat is mandatory. However please consult with Moulvi, before acting on this section. Most Ulema contend that a diamond is a piece of carbon and its value varies, unlike that of gold or silver. | |||||
| One may calculate the Saleable Value of Items-at-hand on the date of Zakat Calculation. | |||||
| Zakat on Silver. | |||||
| Zakat is to be paid on Silver in Pure form or Jewellery, Utensils, Decorative items and all household items including crockery, cutlery made of silver at 2.5% of the prevailing market rates. | |||||
| Zakat on Cash and Bank Balances | |||||
| Zakat should be paid at 2.5% on all cash balance and bank balances in your savings, current or FD accounts. The amount technically should be in the bank for one year. Usually it happens that the balance keeps on changing as per personal requirements. | |||||
| You may make your best judgement and the best way is to pay on remaining amount on the day of calculation | |||||
| Zakat on Loans Given, Funds, etc | |||||
| Zakat is payable by you on loans you have given to your friends and relatives. It should be treated as Cash in Hand. You may deduct Loans Payable by you to arrive at the nett present value of your wealth. However, if you are in doubt, on the return of your money, then you may not calculate it as your wealth. You can add it to your wealth, if and when your receive your money. | |||||
| Zakat is payable on all Govt Bonds, Public Sector Bond, paid-up Insurance premiums, your paid-up portion of Provident Funds, Govt Bills receivables, etc. Pls remember you need to be aware of what the sharia says about Insurance and other types of investments. It is outside od the scope of this Zakath Calculator. | |||||
| Zakat on Landed Property | |||||
| Zakat is not payable on personal residential House even if you have more than one and meant for residential purpose only. Also Zakat is not applicable on the value of Property given on rent irrespective of how many. However Zakat is payable on the rental income itself after deducting the maintenance and other expenses. | |||||
| However if your intention of holding properties is to sell at a future date for a profit or as an investment, then Zakat is payable on the Market Value of the property. Also, if your intention of holding properties changes in the current year, I.e. from self use to business then you need to pay Zakat on that Property Value. | |||||
| Zakat on Business: | |||||
| This is for Business Persons only. No matter what business you are into, you’ve got to pay Zakat on all STOCK-IN-TRADE. The stock must be valued at its Landed Cost Price. If you have any bills receivable (sales given on credit) then you need to add the same towards calculations. | |||||
| Deduct the Amounts due to your suppliers and deduct the loans on stock on the date of calculation. Dead Stock should be calculated on scrap value or its saleable value. Damaged stock should also be valued at its scrap value. | |||||
| Be honest in the calculations, as ZAKAT is an INSURANCE on your STOCK directly from ALLAH and who better an insurer than Him. | |||||
| There is no Zakat on Factory Buildings or any kind of machinery, but there is zakat on products produced in the factory (i.e. finished goods value). Please refer to a competent Moulvi or a scholar who can shed more light on your specific issues. | |||||
| Zakat on Partnership Firms. | |||||
| Zakat can be paid EITHER by the firm OR separately by the owners. If the firm is not paying, and the partner wants to calculate his share, he should take the amount standing to his capital and loan account as per the last balance sheet. Add his estimated share of profit till the date zakat is calculated. | |||||
| This can only be estimated as it is difficult to calculate the exact profit or loss between an accounting year. | |||||
| Zakat on Agricultural Product | |||||
| Zakat is payable on all Agricultural produce including fruits, commercially grown flowers, vegetables and all types of grains at the harvest time itself. The passing of One year does not apply for agrultural produce. If there are two or more crops on the same land per year, then Zakat has to be paid as many times on the crop, irrespective of the time. | |||||
| The Consensus formula for Zakat calculation on Agriculture is as follows: | |||||
| On crops dependent purely on rain water it will be 10% of produce, On crops not irrigated through rain water but use Canal Water, Tank Water, Borewell and Open wells, the Zakat is 5% of the produce. For Crops dependent partly on Rain Water and partly on other water, the Zakat applicable would be 7.5% of produce. | |||||
| Zakat on Animals | |||||
| On all grazing animals like goats, sheep, camel, cows, broiler chickens, the consensus Zakat payable is one animal/bird for every 40 animals owned. However you may wish to give cash in lieu of the animal/bird itself. | |||||
| Please consult your local Scholar or Maulvi or Imaam who can guide you to the right direction, or refer to books of Fiqh if you would like to have first hand confirmation of the situation. | |||||
| Liabilities Deductions | |||||
| If you have any pending tax payable to the govt, as of the date of Zakat Calculation, then the same may be deducted before arriving at the net worth. If you have taken any loans from any person or institution, and if you have not already deducted the same from any of the above sections, then you can deduct your Payables over here. Please be truthful, as Zakat is a sure way of protecting ones wealth if Zakat has been paid on it regularly and fully. | |||||
| LOANS taken only for Zakatable-Wealth should be deducted. Cars, Houses, etc are not Zakatable wealth. So any loan taken for these purposes are not to be deducted | |||||
| FOOTNOTE: Please note that RIBA in any form is Haram and strictly prohibited. So please stay away from taking Loans on Interests AND Collection of Interests from any body or institution or other forms of RIBA’. | |||||
| For those who would like more details there is a good site which gives all details on Zakat. Please visit http://www.islamsa.org.za/library/books/bzewar/part3/zakaat.htm | |||||
| COPYRIGHT NOTICE: You are free to distribute this Calculator, by email, by print or by posts over the Internet. My intention in creating this was to make the task of Zakat as simple and easy as the act of Zakat itself. However if you are making any modifications or changes please keep me informed. | |||||
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