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Zakat and Nisab e Zakat
Zakat and Nisab e Zakat
1
Presentation outline
Definition of zakat
The importance of zakat
Conditions for zakat
People entitle to receive zakat
Methods to determine the
sources of zakat
2
Islamic Financial Planning includes:
Savings
Zakat Planning
Debts – Financing & Credit
Cards
Investment
Takaful
Estate Planning
Islamic Financial Planning includes:
• Discipline of wealth management:
Protect
Preserve
Accumulate
Distribute
Main difference between saving in Islamic
banking & conventional banking?
ABSENCE OF INTEREST!
• Profit instead of interest!
• So how does it work?
• Concept of Guaranteed Custody or
Profit Sharing
• Profit rate is not fixed; depends on the
returns of the investment (ROI)
INTEREST vs PROFIT
INTEREST PROFIT
Rate based on the amount of Rate based on the amount of
money involved profit obtained
10
Definition of zakat
• Literally
– cleansing or purifying of something from dirt or filth
(cleaning)
– Praise, growth and increase
» References: Dr Yusof Qardawi
• Theologically
– Spiritual purification resulting from paying zakat
• Legally / Syariah
– Transfer of ownership of specific wealth to specific
individual (s) under specific conditions
– Religious payment made by a Muslim from his wealth or
income or business or crops or animals in the form of
money or crops or animal according to certain rate to the
zakat authority that is Pusat Pungutan Zakat (PPZ).
The Importance of Zakat
One of the five pillar of Islam
1. Syahadah - is a statement professing monotheism and
accepting Muhammad as God's messenger.
2. Solat - Pray 5 times a day
3. ZAKAT- giving is the practice of charitable giving by Muslims
based on accumulated wealth
4. Sawm / Siyam – Fasting in the month of Ramadhan
5. Hajj - is a pilgrimage that occurs during the Islamic month of
Dhu al-Hijjah to the holy city of Mecca,
Avoid stinginess
Encourage donations
As a mean to express thanks to Allah
Establish sympathy and avoid jealousy
12
Zakat from the perspective of the
Islamic Law
• Zakat is an important duty for Muslim as mentioned
in the Al-Quran: "Keep up prayer and pay zakat".
• Zakat is compulsory :
"Take from their wealth charity (alms) to purify them
and to cleanse them thereby, and pray for them."
[At-Taubah: 103]
Dalil of zakat
• It is considered to be a personal
responsibility for Muslims to ease economic
hardship for others and eliminate inequality.
• It is obligatory for all who are able to do so.
• Growth (in goodness) or increase, purifying
or making pure of one’s wealth.
14
Dalil in Hadith
In one hadith from Bukhari, Abu Hurairah (r.a.) narrated
that the Prophet SAW said:
"Whoever is made wealthy by Almighty Allah and
does not pay the zakat of his wealth, then on the
Day of Resurrection his wealth will be made like a
bald-headed poisonous male snake with two black
spots over the eyes. The snake will encircle his neck
and bite his cheeks and say, 'I am your wealth, I am
your treasure'. "
Like prayer, Zakat
is from amongst
the basic
principles of Islam
and not paying
your Zakat is a
major sin.
Allah (SWT) said,
Muslim
Independent
Absolute ownership
Nisab
Haul
Purpose of business
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People Entitle to Receive Zakat /
Benefeciaries of Zakat
1. The Needy/ Poor/Fakir / Fuqara’ - Income
is less than 50 percent of daily needs.
2. Miskin (Masakin) - Just sufficient to
finance basic needs.
3. Amil - The one with authority / responsible
to collect zakat.
4. Muallaf - Individual who convert to become
Islam.
5. Fisabilillah - Individual involve with
activities to defend and strengthen Islam.
6. Ibnu Sabil - Refugees, homeless,
Orphanage Muslim.
7. Gharmin - Suffered many debt and unable
to settle them.
8. Riqab – Slave, after release from the
owner.
Discussions on the ISSUES: Are there
8 or 7 Benefeciaries???
Some states in Malaysia have only 7
beneficiaries since nowadays there are no
more slaves (captives).
However, there are other states which still
maintain the number of beneficiaries of 8
people.
The reason - because it is stated in the
Holy Quran that there are 8 beneficiaries
of zakat.
Due to that, ar-riqab is implied as zakat for
those who would like to free themselves
from ignorance for instance zakat paid to
people who would like to further their
studies
Conditions for becoming AMIL
Muslim
Pious person (orang soleh)
Mukallaf (competent person who is in full
possession of his faculties)
A freedom man (not a slave)
A fair and just person
Does not come from the descendants of
the Holy Prophet (PBUH)
Trustworthy
Is not a blind person
Is not a deaf person
Male
MUKALLAF
Imam Nawawi and some Islamic scholars such as Ibn Abbas, Ibn
Mas’ud and Muawiyah for instance suggest that zakat on employment
should follow the method of Al-Nama Binafsih.
The zakat is imposed based on the method it is gained and not the
type of wealth (even though the wealth is received in the form of
money)
Al-Mal al-Nami
This is another method to zakat wealth
based on the concept of “productive
wealth expansion”.
However, it is imposed on wealth which is
gained from property or wealth which
could not grow by itself for instance like
business wealth.
Therefore, zakat is ony payable when it
meets the haul and the nisab.
For instance zakat on business income will
only become payable if it meets the haul
and nisab.
Favour to the Poor and Needy
This principle is being used by the
scholars if there are two reasons from two
different schools of thought to pay zakat
on the same wealth at the same time.
Therefore, the approach is to choose the
method that will favour the poor and the
needy
For instance, when there is taraddud which
means argument due to similarity or
ambiguity between two wealth such as
should the rate of zakat for money be
based on qiyas on gold or qiyas on silver?
Cont… - Favour to the Poor and Needy
The jurists conclude that it is better to base
on silver since the value is higher and there is
no disagreement on the nisab of silver that
subject to zakat
Reared animals for instance could fall
under either zakat on reared animals (al-
sa’imah) or zakat on business income (al-
tijarah).
In this case, normally the jurists will
choose zakat on business income rather
than zakat on reared animals because it
favours more the poor and the needy.