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What do you know about Zakat?

by R. MAK. on September 9, 2009

in Islamic Finance

 

Zakat, which is also referred to as alms giving, is one of the Five Pillars of Islam, the fundamental tenets which all Muslims around the world follow as part of the practice of their faith. Under Muslim beliefs, people must have to give alms annually, and they may also choose to give additional alms and donations to charity more than the amounts required by zakat. All adult Muslims that are capable of giving alms must give them so as part of their faith.

zakat3

Important Principles of Islam

In Islam, two principles are very important and these are maintaining communities and doing things for the glory of God. Alms giving is designed such as to support communities, as people may give zakat only to certain types of groups and individuals, and it is also done for God. It is believed by many Muslims that wealth and blessings come from God and are held in trust by the community, and that therefore they are obligated to give back the wealth to purify their own wealth, this will ensure that God will permit it to grow.

Zakat is like a Tax

Essentially, zakat is like a tax. It is levied on the wealth that is held by a Muslim, which can include precious metals, animals, profits from a business, funds in savings, and other investments. Traditionally, Muslims have to give 2.5% of their wealth as zakat, and it can also be given in kind. Explaining this in other words, someone having money would give alms in the form of funds, while a farmer might pay zakat in the form of grain, cattle, or other agricultural commodities.

zakaat al fitrah

Payment of Zakat in Holy Month of Ramadan

People are allowed to give alms at any time of the year, and they are encouraged to do so, but many people have decided a particular time of paying their zakat, and that particular time is during the holy month of Ramadan. During Ramadan, devoted Muslims are also expected to pay an additional zakat and that is based on the amount of food which is utilized by them during the month. Muslims may give out alms directly, or they may give them to an intermediary who is responsible for distributing them responsibly.

zakat-calculator

Recipients of Zakat

According to the Qu’ran, the poor and needy people are the prominent recipients of zakat, but alms can also be given to travelers that are in need of funds, enslaved peoples, and the individuals who collect and administer the tax. People can also choose to give alms “for the cause of Allah” by funding a school, providing a needed service in a community, or performing other acts which gives benefit to society as a whole. Muslims may also give alms to “allies” such as friends and converts to Islam, and one need not necessarily be poor to receive alms.

Many websites are having calculators for people who want to make sure that they give the appropriate amount. Muslims can also take assistance from Imams and other religious leaders who are having difficulty in determining the amount of their zakat payments.

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