Muslims who meet the criteria of wealth are required to pay zakat, one of the Five Pillars of Islam. This rule has played a major role in the history of Islam, leading to disputes during the Ridda Wars.
There are many countries with large Muslim populations that allow individuals to choose whether to pay zakat or not. Zakat is considered a mandatory tax, although not all Muslims are required to pay it. Libya, Malaysia, Pakistan, Saudi Arabia, Sudan, and Yemen are not among them.
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Those who fail to pay zakat in places where it is compulsory are treated like tax evaders and warned that they will face God’s punishment.
Zakat, however, has been the subject of considerable controversy and criticism. Some Islamic scholars and development workers claim the fund has not lifted people out of poverty, and the funds have been mismanaged.
Zakat is calculated based on income, not wealth. Property used to generate income, such as a rental or vacation home, counts toward wealth.
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Nisab vs. Zakat
The term nisab is often used alongside the term zakat. It refers to the minimum amount of wealth a Muslim must possess before being obligated to pay zakat. During a lunar year, no zakat is owed if personal wealth is below this minimum. The nisab is equal to 87.48 grams of gold or 612.36 grams of silver.
Individuals become eligible to pay zakat once they reach the threshold during the full lunar year, so one individual may owe it earlier than another. This is where nisab comes into play.
It is often paid out at the end of the year after sums are calculated on any leftover wealth. Some Muslims believe that paying zakat during Ramadan brings good luck. In order to do this, individuals must take regular inventory of their possessions and wealth on a weekly or monthly basis.
In Islam, what Zakat is?
As one of the pillars of Islam, zakat requires Muslims to give a portion of their wealth to charity as one of their financial obligations. In order to qualify for zakat, Muslims must meet a certain threshold. The amount is 2.5% or 1/40 of an individual’s total savings and wealth. Zakat can be paid any time during the lunar year. There are some Islamic countries in which zakat is mandatory, while there are others where it is optional.
Zakat Calculation: How Do You Do It?
As soon as a Muslim reaches nisab, or the threshold, which equals 87.48 grams of gold or 612.36 grams of silver, they must pay zakat. In order to determine their obligations, Muslims can use any number of zakat calculators online. The total amount they must pay is 2.5%, or 1/40 of their total savings and wealth.
Zakat Rules: What Are They?
Each lunar year, individuals who qualify for zakat must meet a certain threshold known as nisab. It is calculated at the value of 87.48 grams of gold or 612.36 grams of silver. Individuals whose wealth exceeds these amounts must pay 2.5% of their wealth in zakat. Individuals whose wealth exceeds this amount are not required to pay zakat.
What is the Zakat obligation for Muslims?
If a Muslim reaches nisab, he or she must pay zakat of 2.5% of the total value of their wealth less liabilities. This is the threshold, which equals the value of 87.48 grams of gold or 612.36 grams of silver. Some Muslim countries make zakat mandatory, similar to taxes. Others do not.
In Islamic communities, Sharia is a set of religious laws that dictates various facets of Muslim life. Zakat is an Islamic term that obligates Muslims who are able to do so, to donate a portion of their wealth to charitable causes. This requirement is mandatory in many Islamic nations, but voluntary in others. Whether required or not, using an online zakat calculator can help individuals calculate the proper amount they should donate each lunar year.
