Zakat is not permissible to be spent on the construction of a mosque. This is because it does not fit under any of the eight categories mentioned in the ayah of Surah Tawbah. It is our duty to follow the instructions set by Allah SWT and the guidance of knowledgeable scholars, meaning you cannot spend your Zakat to fund a mosque.
It is permissible for you to spend your Zakat on building a water well. With this in mind, you may donate your Zakat to our water appeal. If you know someone who is in unmanageable debt and who is not reliant on you financially e. Your Zakat can go towards supporting our appeals that are designed to help those who are in need, ensuring a positive change is made for which Allah SWT will reward you. Our Recent Posts. September 21, How Does Zakat Work? Stay Updated Subscribe to our newsletter to hear about our work, how you are helping and ways you can support us in the future.
Tax exempted under IRS c 3. Donate Now. It is considered a type of worship and self-purification. Zakat is one of the five pillars of Islam. Zakat is not the charitable gifts given out of kindness or generosity, but it is the mandatory giving of 2. How to calculate Zakat on money, cash, or savings:. Zakat helps a person acknowledge that everything comes from the Almighty and that we do not really own anything ourselves. Zakat is a way to remind us that we cannot take anything with us when we die so we should not cling to our wealth.
Zakat also helps to free oneself from the love of possessions and greed. Money deposited in Islamic banks: The Zakat has to be paid on the capital money and on the profit. However, it is permissible to set a particular time for the payment of Zakat for each independent money. If the amount of money decreases and drops below the nisaab during the year, there is no need to pay Zakat and you start calculating the year again. This time when the amount of money reaches the nisaab again you have to pay Zakat.
You must pay Zakat on the profits of the saved money. Zakat will be paid on the whole amount when one year has passed since the original money was acquired, even if only a few days have passed since the profit was acquired. Money deposited in banks that deal with interest and usury: Zakat is due on the capital money only, and there is no Zakat on interest.
In Islam interest is considered as forbidden and impure money which is not the property of its owner. Helps in Building The Society — The first benefit of Zakat is that it helps those in the society who are less fortunate.
If one class of society keeps on gathering all the money and does not provide anything to anyone else, then the rest would stay in the same plight and the society would be distributed in sections. Therefore, when the wealthy of the society give Zakat, it means that the ones, who are non-wealthy, get a chance to enjoy a better lifestyle.
Circulation of Money — The second thing that Zakat brings to table pertaining to its being an obligation is the fact that it leads to circulation of money. Zakat is a form of charity and any charitable deed means that the money gets out of the hands of the ones who are already filthy rich with it. Thus, this way the money gets out of the circle of a few people and circulates in the whole economy.
Develops a Sense of Sacrificing — Thirdly, Zakat also gives and teaches the message of sacrifice. Wealth is perhaps one of the major elements which people love the most.
Therefore, when a person gives from his or her wealth, it actually means that he or she loves the order of Allah Almighty more than their personal liking and they are willing to sacrifice the thing they love for the order of Allah the Magnificent. The Collectors — These are the people who are given the duty of collection of Zakat from other people, however, they themselves cant afford to live a normal life.
The New Converts — People who convert to Islam are also eligible as Zakat recipients as with their conversion to Islam they need assistance and help for a new start in life.
To Free Slaves — The money of Zakat can also be spent on freeing the slaves as well. To Help Someone Pay Debt — Those who are in debt and cant afford to pay it off on their own are also eligible for Zakat. In Cause Of Allah — Zakat can also be given to people who strive in the way of Allah, especially in the form of fighting the usurpers. For Travelers — Zakat can also be given to the travelers and wayfarers as they might need the money when it comes to travel arrangements. How to Calculate Zakaat Besides the major misconceptions of Zakat, Muslims often find it difficult to calculate the amount of Zakaat liable upon their possessions.
Zakatable assets should not be confused with net worth, which is simply your total assets properties, cars, equipment etc minus all debts mortgage and other long-term loans.
The general rule is that you pay Zakat on your accessible wealth that has the ability to grow and generate more wealth i. For many individuals, this will mostly be things like cash in their savings accounts and stocks a topic which we will elaborate on.
Cash and equivalents encompass all forms of cash, gold and silver. Cash is any of your own savings in your bank account and any physical cash you hold in your wallet or under your mattress. Gold and silver are counted because they were the most common forms of currency used at the time of the Prophet Muhammad pbuh and through most of human history and are still a reliable benchmark for wealth today.
As long as the principal is halal, you must pay Zakat on the principal. Cash and equivalents also include the proceeds from the sale of an illiquid asset such as a home or other personal items if proceeds are held for at least one lunar year since your Zakat date as it is now cash you have access to use for other things. Income from a rental property after expenses is Zakat eligible. For many, this income simply ends up in their personal or business bank account as part of their net savings Zakatable assets , which makes the calculation easier.
Make sure to deduct expenses such as property taxes, utilities, maintenance, renovations etc. These expenses need to be paid for before you calculate your Zakat amount. Business owners need to pay Zakat on the fair market value of inventory that is designated for sale. The inventory that qualifies for Zakat needs to be held for more than one year and not under contract , or in other words, not already sold to a customer in advance.
The fair market value is the price at which you can reasonably sell your inventory, not your cost. Money that is owed to you and you expect to get back soon i. For business owners, this is known as accounts receivable. Good debt refers to personal debt that you expect back from a trusted person soon or can get easy access to. Accounts receivable and good debt both are essentially the same concept in terms of Zakat, except accounts receivables are a more regular part of everyday business activities.
So how do we handle bad debt or a loan you give out to be repaid after more than a year? Zakat is not due on bad debt, money that you have lent and have no certainty as to whether or not you will get it back.
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