3. Zakat Meaning
Zakat means , in Language , :
Blessing, Purity, Growth and
Uprightness .
It means in Shariah :a defined
allocating amount from a defined
money for an assigned people .
4. Zakat Rules
الزكاة أحكام
Muslim Scholars have summarized
Zakat Rules as follow :
- Zakat is a Farida from Allah (obligatory ).
- Zakat is a Financial Worship .
- Zakat is a Believe .
- Zakat is Compulsory to Muslims.
- Zakat is Due to an assigned Receivers.
5. - Zakat is Annuity.
- No Zakat until Wealth exceeds Nisab
- Zakat affairs are the Responsibility
of Government.
6. Zakat and Tax Differences
-Zakat is a financial Worship ,and a pillar
of Islamic Religion , but Tax is compulsory
by the Government by Low ragardless to
Religion.
- Zakat is based on Religious and Ethical
Values ,but Tax mostly ignores such
Values and based on monetary factors .-
7. - Zakat is calculated according
to Fiqh Rules , but Tax is
calculated according to
Governmental Rules.
-
8. -
- Zakatable wealth is gained from
Good and Halal Sources, but
Tax
Revenues and
Incomes may be earned from
Non-Halal and Worse Sources
from the sight of Islam Rules .
9. - Zakat Rules are stable and permanent
for each Time and place because they
excreted from Quran and Sunnah ,while
Tax Rules are flexible.
- Zakat purifies soul and money ,while
Tax does not .
12. Zakat Accounting Meaning
It means the calculation,
reviewing and announcing of
Zakat on money .It is
governed by a group of
Accounting rules, extracted
from the sources of Islamic
Shari’ah,
13. Zakat Accounting Objectives
They are as follow:
- Determining the Zakat Base .
- Calculating the Due amount of Zakat .
- Preparing Zakat Statements and Reports .
- Distributing Due Zakat amongst
its Duers.
14. Zakat is calculated according to the lunar
year. Counting starts when the amount of
money attains the Nisab (the minimum
amount on which Zakat should be
paid).
Zakat Accounting Rules are as Follow:
1. The Lunar Year
15. 2. Independence of each
Year:
Each Zakat year is an independent one,
and Zakat on a given amount of money
should not be more than once in the
same year. Duality should be avoided.
The Prophet (Peace be upon him) said:
“No duality in Zakat
giving”.
16. 3 Actual or Assumed
Growth:
Actual or assumed growth of an
amount of money is a condition for
any Zakat is to be given from this
money. Therefore, Zakat is not due
on fixed assets or things for personal
use. This is because the condition of
actual or assumed growth would not
be met.
17. 4. Zakat Base should reach
Nisab
Zakat is due on money which is
abounding (more than basic needs). No
Zakat is due for little amounts of money.
The amount of money should reach the
Nisab. This guarantees that only those
who have the capacity of paying will be
obliged to pay.
18. 5. Calculating Zakat on the Total
or Net Zakatable Money
For every kind of money or activity there
is a rule for calculation Zakat which is
due on it. Some are calculated in relation
to the total amount and others are
calculated in relation to the net amount (
Property).
19. 6. Grouping Money of the Same kinds
together as Zakatable Base:
It is permissible to group cash money of
wealth to cash money available from
offers of trade and other gained cash
money, so that for all these monies there
would be one Nisab and one Zakat Year.
20. 7. Evaluating Zakatable Money
according to the Current value .
Evaluating cash money of wealth and
cash money from offers of trade to define
the due Zakat should be according to the
current value at the time of paying Zakat.
They should not be evaluated according
to the historic value, cost or market,
whichever is less.
27. In order to calculate Zakat on money, an
accountant needs the following tools and
methods:
1. General Balance Sheet (Financial Position)
made on the date of calculating
Zakat.
2. Final Accounts or annual report for the
ended year, on which Zakat is to be
calculated.
28. 3. Clarifications concerning the Balance
Sheet and the final accounts, such as:
- Current value of Zakatable assets.
- Bad and good debts to be bad.
- Bad and good debts to be collected.
29. - Revenue from fixed assets which are
for collecting or for investment.
- And other necessary clarifications
concerning calculating
Zakat.
30. 4. The price of Gold at the time when
paying Zakat is due, in order to
calculate the
Nisab
5. Different Monies possessed by the
Zakat giver should be grouped if
they are of the same
kind.
32. The diagram in the following
summarizes the procedure for
calculating Zakat on
money.
33. Diagram for calculating Zakat
Starting Point
(
1
)
(
2
)
Prepare the general Balance Sheet and
clarifications on it
Define and assess the Zakat assets
34. (3)
(4)
(5)
Define and assess liabilities which must be met
Define the receptacle of Zakat by deducing
(3) from (2)(Zakat Base )
Define the Nisab according to the price of gold
35. (6)
(7)
(8)
Compare the receptacle of Zakat with the Nisab
Calculate the Due Zakat if the receptacle
reaches the Nisab
The Due Zakat = Zakat Base By Zakat Rate
37. Zakat Statement on Cash Wealth
for the year ended / /
Total
Sub-
total
Item
**
**
**
* Elements of cash wealth:
- Saudi ryal
- American Dollar (after assessing
according to market price)
- Gold and silver monies (after
defining weight or number)
38. Zakat Statement on Cash Wealth
for the year ended / / (Continue)
Total
Sub-
total
Item
**
**
**
**
**
- Pound Sterling (after assessing according
to market price)
- Ingots of gold and silver (after defining
weight)
- Investment bonds (after assessing
according to market price)
- Jewelry for investment (after assessing
according to market price)
- Jewelry which exceeds the amount
normally used for beautification.
39. Zakat Statement 0n Cash Wealth
for the year ended / / (Continue)
Total
Sub-
total
Item
***
***
***
***
*Total Zakat cash money
Deduced: Debts which must be paid now
by the Zakat giver (if any)
* Cash wealth Zakat Receptacle
•
Compare with the Nisab (the equivalent
to 85 grams of gold) if receptacle reaches
the Nisab, then Zakat should be calculated
as follows:
* Amount of Zakat =
Zakat receptacle x 2.5% =…
40. Zakat Statement on Trading and
Industry Wealth
for the year ended / /
Total
Sub-
total
Item
****
**
**
**
**
**
* Zakatable Wealth for trading: such as:
- Goods for Trading
- Duties / documents of payment
- Investments for trade.
- Cash in banks.
- Cash in safe.
41. Zakat Statement onTrading and Industry
Wealth
for the year ended / /
Total
Sub-
total
Item
****
**
**
**
**
* Deduced: Short Term Liabilities: such as:
-
Debtors / documents of payment
-
(to be paid).
- Suppliers.
- Loans due.
- Other Short Term Liabilities.
42. Zakat Statement onTrading and Industry
Wealth
for the year ended / / (Continue)
Total
Sub-
total
Item
***
***
***
***
* Net Zakat Wealth for Trade
Added: Earned money (if any).
*The receptacle of Zakat on wealth for
trade.( Zakat Base )
•
Compare with the Nisab (the equivalent
to 85 grams of gold) if the Zakat Base
reaches the Nisab, Zakat should be
calculated as follows:
* Amount of Due Zakat =
Zakat Base x 2.5% =…
43. Zakat Statement on Plants and fruits
for the crop……
Total
Sub-
total
Item
***
**
***
**
**
**
**
**
* The value of the crop:
- Deduced: - The expenses of farming (with the
condition that they do not exceed one third of
the value of the crop).
- The cost of farming.
- Governmental taxes.
- Other expenses related to the crop.
Net value of the crop.
Deduced: Currently due debts (if any).
44. Zakat Statement on Plants
and Fruits for the crop……(Continue)
Total
Sub-
total
Item
***
* Zakat Base of Plants and fruits.
•Compare with the Nisab, the value of which is 5 Awsaq or
their equivalent. if the Zakat Base reaches the Nisab, Zakat
should be calculated as follows:
Amount of Due Zakat:
* in the case of watering by cost:
Zakat Base x 5% =…
* in the case of watering without cost:
Zakat Base x 10% =…
* The amount of Zakat should be taken from the
crop.
45. Case study:-
Mr. Ahmed is salaried person and own the wealth different
shapes. Now he wants to pay his zakat as the year cycle
completed. Help him to calculate the amount for zakat
payment.
Salary: 100,000 yearly
Bank account: 25,000
Monthly expense: 45,000 yearly
Residential house: 5,000,00 (current value)
Debt of others: 13,000
For investment: 24500
Shares: 23,000
