ZAKAT QUESTIONS

Zakat al-Mal (Purification of Wealth) is a cyclic charity based on the amount of wealth owned by a Muslim individual or organization.

• This payment is obligatory upon any Muslim individual or organization that has completed the requirement of nisab over one hijrah calendar year.
• The payment is 2.5% out of the total wealth deemed for zakat.
• Nisab is the equivalent value of 3 oz. of gold. Check here to calculate Zakat.

Zakat al-Fitr (Purification of Body) is a cyclic charity paid by every able Muslim and their dependents during Ramadhan before the Eid-ul-Fitr prayer.

There are eight categories of people who are the beneficiaries of zakat which are mentioned in the Qur’an.

“The alms are only for the Fuqara’ (the poor), and Al-Masakin (the needy) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allah’s Cause, and for the wayfarer (a traveler who is cut off from everything); a duty imposed by Allah. And Allah is All-Knower, All-Wise.” [Al-Quran 9:60]

1. The Poor (al-Fuquraa) 
   Those who own property in excess of basic necessities but below the value of Nisab (minimum required before you are obligated to pay zakat).
2. The Needy (al-Masakin)
   Persons of extreme poverty who possess no wealth whatsoever.
3. Administrators of Zakat (al-A’mileen)
   Those persons who are appointed to collect Zakat. It is not necessary that this be a needy person.
4. Those inclined to Islam (Muallaf)
   Those poor and needy persons who are given Zakat with the intentions of solidifying their hearts because they maybe recently converted to Islam or to bring them closer to Islam.
5. Captives seeking freedom (Riqab)
   slaves whose masters have agreed to set them free on a payment of a fixed amount. Zakat may be used to purchase their freedom.
6. Debtors (al-gharimeen)
   A person whose debts exceeds his assets and his net assets (after deducting his liabilities) is below the Nisab limit. To determine whether a person qualifies, his basic necessities of life (house, furniture, clothes, vehicle, etc.) will not be taken into account. It is conditional that the debts were not created for any sinful purpose.
7. For the cause of Allah (fi sabil lillah)
   Those who are away from home in the path of Allah.
8. Wayfarers (ibn as-sabil)
   A traveler, who, whilst wealthy at his residence, is stranded and in need of financial assistance

Reference:  http://www.hidaya.org/publications/zakat-information/who-is-entitled-to-receive-zakat

Every Muslim who has attained the age of puberty and owns enough assets (see below) is required to pay zakat.

1. A Muslim will only be required to pay zakat if he or she has full and legal ownership of an asset.
2. Zakat is payable only on those assets that are acquired for the purpose of creating or generating wealth. Some examples of this type of assets are cash savings, inventory of goods used for trade or sale, investments such as gold or securities that have potential for appreciation in value, and livestock or crops that are traded or sold.
3. Zakat need only be paid on those assets that exceed a minimum value. This minimum value is calculated based on the market price of 3 oz. of gold. This minimum value is termed nisab.  See Zakat Calculator
4. Haul is defined as the completion period for a zakah asset. The length of time for haul is one Hijrah (islamic) year when zakat is required on an asset.

Once these conditions are met the payment of zakat becomes an obligation for a Muslim.

Zakat becomes due immediately one year from:

• The first day you acquired nisab for the first time.
  • Nisab is the minimum amount that a Muslim must have before being obliged to Zakat.  It is calculated as the current price of 3 ounces of gold.  (see Zakat Calculator)
• You should pay it on the same day you chose every year.