Zakat is a crucial act of charity performed by Muslims that ensures wealth is distributed more evenly within the society. It is an obligatory form of almsgiving that purifies a Muslim’s wealth. As a fundamental pillar of Islam, Zakat is an essential obligation on Muslims that must properly be fulfilled.
This guide will help you understand the basics of Zakat, including how much it is and how to calculate it, ensuring you fulfill this essential obligation accurately and with ease.
What is Zakat?
Zakat is a mandatory form of charity that Muslims are required to give annually. It is usually 2.5% of one’s accumulated wealth that meets the nisab (minimum threshold) set in Islam. This wealth can include cash, gold, silver, business income, and other assets.
The main purpose of Zakat is to assist the poor and the needy, ensuring that wealth does not remain concentrated in the hands of a few.
The importance of Zakat goes beyond charity. It is a way to detach oneself from worldly possessions while deepening the connection with Allah (SWT). Zakat is also a reminder of the responsibility Muslims have towards one another.
When Is Zakat Obligatory?
Zakat becomes obligatory for a Muslim when they meet the following conditions:
- Possession of Nisab: The wealth must exceed a certain threshold, known as nisab – the minimum amount of wealth that a person must own before Zakat becomes obligatory.
- Full Lunar Year: Zakat is due once a full lunar year (Hijri year) has passed since the wealth reached the nisab.
- Ownership of Wealth: You must fully own this wealth and it should not be designated for any debt, liabilities, or essential living expenses.
How to Calculate Zakat
The key steps in calculating Zakat are:
- Know Nisab: The nisab is usually equivalent to the value of 87.48 grams of gold or 612.4 grams of silver. The value varies based on the market price so it’s always wise to check the current rates.
- Calculate Your Wealth: Calculate your total wealth including gold, silver, savings, income, and any investments and shares that have been in your possession for one full lunar year. Subtract any debts or outgoings due to calculate the net wealth.
- Apply the Zakat Rate: If the value of your assets meets the nisab, you must take out Zakat which is generally 2.5% of your wealth after subtracting debts. This would be your Zakat-able wealth x 2.5% or wealth x2.5/100.
Giving Zakat Throughout the Year
While giving Zakat in Ramadan has its rewards, Zakat is not confined to this blessed month. Muslims are encouraged to give Zakat throughout the year as it is a continuous responsibility on all Muslims. So, while Ramadan holds special significance for charity, remember that Zakat can be and should be given at any time during the year to help those in need.
More than a financial obligation, Zakat is a spiritual practice that purifies wealth, nurtures empathy, and strengthens the community. So, whenever the opportunity arises, Muslims should strive to fulfill this pillar of Islam. By doing so, you not only help others but also benefit from the blessings it brings into your own life.
From Your Zakat to a Saved Life
At Indus Hospital Hospital & Health Network, 70% of patients are Zakat eligible and can avail life-changing medical treatments through open-hearted Zakat donations. It plays a significant role in ensuring that IHHN continues to provide 100% free-of-cost healthcare services to all individuals who need it. It is what allows us to go the extra mile in facilitating all patients and their families with quality treatment procedures and a comfortable environment throughout their time at IHHN.
