Zakat is the third pillar of Islam that involves mandatory charity. It is mentioned frequently in the Quran and details were further revealed through the Prophet Muhammad. Zakat purifies wealth and souls, and is a form of worship that benefits both the giver and recipients. It must be paid annually on certain categories of wealth that meet the minimum threshold, known as nisab, which varies based on asset type. Zakat can only be given to specific groups of eligible poor and needy people, as well as those employed to collect it.

3. Zakat - َ
َ‫ة‬ ٰ
‫و‬َ‫ك‬َّ‫ٱلز‬
• 3rd Pillar of Islam
• Zakat-Charity mentioned immediately after Salât-Prayer in 82 verses of the Quran
• Commandment of Zakat came within first few years of Prophethood in Makkah
• The details of Zakat was revealed in the 2nd year after the Hijrah
• Linguistically means increase/growth, purification/taharah, blessings/barakah
1. GROWTH = “The example of those who spend their wealth in the way of Allah is like a seed
[of grain] which grows seven spikes; in each spike is a hundred grains. And Allah multiplies
[His reward] for whom He wills. And Allah is all-Encompassing and Knowing.” (Al-Baqarah:
2:261)
2. PURIFICATION = “Take Sadaqah (charity) from their wealth in order to purify them ……..
and Allah is All-Hearer, All-Knower.” (At-Taubah: 9:103)
3. BLESSINGS = “My mercy encompasses all things. Thus shall I decree it for those who are
God-fearing and who give the Zakât-Charity, and those, moreover, who believe in [all of]
Our revealed] signs.… (Al-Arâf, 7:156)

4. Give charity, be it minor or major, for in it there are ten gains, five in this life, and five in the Hereafter.
As for the five in this life, they are these:
1. It purifies wealth.
2. It purifies its giver from sins.
3. It repels calamity and illnesses, for the Prophet ‫ﷺ‬ said: “Heal your sick with sadaqah.”
4. It brings happiness to the poor, and the best acts are those that bring happiness to the righteous
5. It brings blessings to wealth and increase in provision
As for the five in the Hereafter, they are these:
1. It shelters its giver from the sweltering heat (on the Day of Judgment)
2. It lightens one’s divine reckoning
3. It makes heavy the Scale of one’s good deeds
4. It aids one’s crossing of the Traverse (bridging Hell that people must pass to enter Paradise)
5. It elevates one’s level in Paradise.
The Ten Gains of a Charity

5. 1. Makes One Aware that All Wealth Is God’s
2. Purifies the Soul of Miserliness
3. A Cure for the Love of Worldly Things
4. Trains One to Give
5. Trains One to Mirror Divine Qualities
6. An Expression of Thankfulness to God
7. Improves Ties of Mutual Love

6. 1. “As for those who hoard gold and silver and do not spend it in the way of Allāh, give them news of a
painful punishment. On the day it (i.e. the wealth) will be heated up in the fire of Jahannam, then
their foreheads and their sides and their backs shall be branded with it and (it will be said to them),
'This is what you had accumulated for yourselves. So, taste what you have been accumulating.’”
(Surah At-Taubah 9:34-35)
2. “And let not those who hoard wealth, which Allāh has bestowed them with from His grace, think
that it is better for them. No, it is worse for them. That which they hoard will be made into a collar
(in the form of a snake and put around their necks) on the Day of Qiyāmah. To Allāh belongs the
inheritance of the heavens and the earth. Allah is All-Aware of what you do.” (Surah Al-Imran 3:180)
3. Abū Hurayrah radhiyallāhu 'anhu reports that Rasūlullāh sallallāhu 'alayhi wasallam said, “If
anyone possessing gold and silver does not pay what is due, then on the Day of Judgement his gold
and silver will be made into sheets and will be heated in the fire of Jahannam. His side, forehead
and back will then be branded with (the heated sheets), again and again, on that day, the duration
of which will be fifty thousand years.” (Muslim : Book 5, Number 2161)
Punishment for withholding Zakāt

7. Wealth (SAVINGS TAX – a debt to Allah) that is
• Taken from specific groups
• At specific rates
• When the stipulated period is met
• To be given to specific groups
Zakat - َ
َ‫ة‬ ٰ
‫و‬َ‫ك‬َّ‫ٱلز‬

8. Zakat is Obligatory on
• Muslim
• Owner & possessor of wealth equaling Niṣāb
• Owning Niṣāb amount after a lunar year

9. Zakat Process
Establish a Zakat
Calculation date
based on LUNAR
calendar (Hawl)
Go to
https://www.kitco.com/
Get the current price
of Gold & Silver
Calculate the
monetary value of
the NISAB based on
the current price of
Gold & Silver
Add up all the
Zakatable
Assets
If
Zakatable Assets
> NISAB
Zakat =
2.5% x
Zakatable
Assets
Pay
Zakat
IMMEDIATELY

10. If Zakatable assets are above Nisab amount, pay Zakat
on Zakatable Assets at year end (red column – 12th
month) even if there is an extra asset at end of year.
Specify a certain LUNAR CALENDAR DATE and
calculate your Zakatable wealth on that day, and
then pay ZAKÂT annually on the same LUNAR
CALENDAR DATE every year. Once zakat becomes
due on wealth, it MUST BE PAID IMMEDIATELY,
and it is not permissible to delay it, otherwise you’ll
be sinful.
Hawl
Zakat
Payable on
Muharram
Safar
Rabi-ul-
Awwal
Rabi-ul-
Thani
Jumada-
l-Ula
Dhul
Qadah
Jumada-th-
Thaniyya
Rajab
Shaaban
Ramadan
Shawwal
Dhul
Hijja
Current Year “1442”
1441 1443

11. Nisab
Amount of wealth which a person must posses before Zakah becomes obligatory on him.
• The Nisab on GOLD 85 grams of gold (20 mithqaalan; $4,720 @ $55.52/gram)
• The Nisab of MONEY 595 grams of silver (200 dirhams; $476 @ $0.80/gram)
https://islamqa.info/en/answers/64/minimum-amount-nisaab-required-to-pay-zakat-in-dollars
• The Nisab on COWS 30 cows
• The Nisab on GRAIN 653 kilograms
Annual Income Expenditure Total
Savings Nisab Total
Savings
Zakat @ 2.5% of Savings

13. Zakat on long term Investments
• 401(k), Keogh, IRA, SEP-IRA, Roth IRA, etc.
(WA)-(PP)-(PT)=(ZA)
Where,
WA = Withdrawal Amount
PP = Prescribed Penalty
PT = Prescribed Tax
ZA = Zakatable Amount

14. Zakat on Business Commodity
• ‘Trade Goods’ or ‘Saleable Goods’ are assets acquired for profit through sales, such as
business inventory. These are items convertible to cash in the future.
• Any asset, if there is an intention to sell – then they fall in this category
• They include land and lots, houses, buildings, furniture, clothing, foodstuff, machinery,
jewelry—anything purchased with an intention (or openness) to sell or trade for profit at some
point. Zakatable @ 2.5%, on the day Zakat is calculated on the available inventory.
• Stocks and shares are trading goods, if the intention is for selling. Then they are zakatable @
2.5%, on the day Zakat is calculated on the available inventory.

15. Zakat on Investments
• “Exploited Assets” and are considered a form of business wealth, remain with the owner as
permanent capital. They are possessions obtained, not for resale, but to generate income and to
provide benefits to their owners. These include assets rented for profit, such as residential
buildings, means of transportation, and anything rented out for profit. They also include producer
animals, sheep for wool, cows for milk, bees for honey. The asset itself is not subject to Zakât,
but the “growth” or profit from the asset is zakatable
• Zakât for a business is calculated on the Zakât due date according to the following formula:
[(AMWV+C+GD) - (ED)] x 2.5 percent = Zakât Due
Where,
AMWV = Appraised Merchandise Wholesale Value
C = Cash on Hand and in Deposit
GD = Good Debt Owed to Business
ED = Eligible Debt

16. Zakat on Debt
• Islam holds interest unlawful and bonds earning interest are no exception. All interest income is to
be given to the poor (separately from Zakât) with no expectation of divine reward
• The spirit of the Sharîah is ease not hardship, moderation not excess. Therefore, it permits
deduction of “debts of necessity” not “luxury.” Uthmân ibn Affân (RA) - pay your outstanding debts
on or before the Zakât due date. Then calculate your Zakât on all remaining zakatable wealth.
Are Debts Zakatable for Lenders?
1. A good debt is acknowledged by the debtor, who expresses a willingness to pay.
Lenders must pay Zakât on good debt every Zakât-year (hawl).
2. A bad debt will likely not be repaid, either because the debtor is insolvent, or he
denies a debt for which there is no corroborating proof. The lender does not pay
Zakât on bad debt, according to the majority of scholars. But should the lender
ever receive repayment on a past bad debt, he is to pay the Zakât due on it for
one year only.

17. https://www.zakat.org/resource-center/zakat-calculator
Zakat – Islamic Society of North America (isna.net)

18. 1. Faqeer: poor; one who has some money, but not sufficient for
his basic needs, serious deficiency of essential resources
2. Miskeen: destitute; one who has nothing
3. Amileen: zakat collector,
4. Mu'allafah Qulubuhum : to soften the hearts or new muslims
5. Riqaab: to free slaves – not applicable in modern times
6. Gharim : one in debt for a legitimate reason
7. Fi Sabeelillah: in the path of Allah
8. Ibnis-Sabeel: wayfarer; one stranded away from home, with no
money available to him
“Zakah expenditures are only for the poor and for the
needy and for those employed to collect [zakah] and for
bringing hearts together [for Islam] and for freeing
captives [or slaves] and for those in debt and for the cause
of Allah and for the [stranded] traveler - an obligation
[imposed] by Allah. And Allah is Knowing and Wise.”
(At-Taubah: 6:60)
Zakat Recipient

19. • General welfare projects
• Hospitals
• Madrasahs
• Construction projects for Mosques, hospitals etc.
• A rich person
• One’s Spouse
• One's parents, grandparents, great grandparents etc.
• One's children, grandchildren, great grandchildren etc.
• A non-Muslim
• Employees as remuneration
• Prisoners
The following cannot receive Zakāt

20. ✓ The giver must declare to Allah (SWT) his intention to give the Zakāt.
✓ Acknowledging that we are not the true owners of anything in this world and
everything belongs to Allah Almighty
✓ The Zakāt must be calculated on the day that it is due
✓ Don’t cheat – It’s a transaction between only you & Allah
✓ Zakat should be paid to the locally deserving ones
✓ Give to (permitted) needy relatives
✓ Give with humility
✓ Pay in secret, preferably
✓ Need not explicitly mention it is Zakat
✓ Don’t remind them of it
✓ After the offering, the payer must not exaggerate on spending his money more
than usual means.
Zakat Etiquette

21. ✓ ICNA Houston - https://www.icnahouston.org/zakat-eligibility/
✓ Islamic Society of Greater Houston (ISGH) - https://isgh.kindful.com/?campaign=302837
✓ Amaanah Refugee Services - https://amaanahservices.org/donate/
✓ Islamic Relief USA - https://irusa.org/islamic-relief-usa-to-support-zakat-eligible-families-in-the-
greater-houston-area/
✓ Any LOCAL MASJID will have Zakat Funds for local needy people
Resources for local distribution of Zakat
Other Resources for distribution of Zakat
✓ Helping Hand for Relief & Development - https://hhrd.org/new/zakat
✓ Amoud Foundation - https://www.amoudfoundation.org/cause/zakat-1/
✓ BDesh Foundation, Inc - https://bdeshfoundation.org/zakat/
✓ Zakat Foundation In Bangladesh - https://www.zakat.org/our-work/where-we-work/bangladesh

22. Zakât al-Fitr
✓ It means the Alms of Fast-Breaking because it marks the end of the compulsory
fast of Ramadan
✓ To purify one from the imperfections of his or her fast during Ramadan
✓ It is obligatory on all Muslims themselves, regardless of wealth with no exception,
rich or poor, male or female, young or old, so long as one has provision enough
for the day of Eid for oneself and one’s dependents.
✓ It enables the poor to partake in the celebration of the Eid of Fast-Breaking
✓ It is due before the Eid al-Fitr prayer

23. Zakat Sadaqah
Obligatory Sunnah
Pillar of Islam Not a Pillar of Islam
Has specific rates and amount (Nisab) No specific rates and Amount
Specific time / period (Hawl) Not time specific
Given to specified recipients
May be given to whoever the giver
wishes
Those who do not give Zakat are
punished
Those who do not give sadaqah are
not punished

24. Sadaqah/Charity
✓ Literally, ‘Sadaqah’ means “to speak the truth.”
✓ One may give charity at any time with the intent of expiating sins or wrongdoing. Here are three common types of Kaffârah:
❑ For breaking Promise - Allah will not impose blame upon you for what is meaningless in your oaths, but He will impose blame
upon you for [breaking] what you intended of oaths. So its expiation is the feeding of ten needy people from the average of that
which you feed your [own] families or clothing them or the freeing of a slave. But whoever cannot find [or afford it] - then a fast
of three days [is required]. That is the expiation for oaths when you have sworn. But guard your oaths. Thus does Allah make
clear to you His verses that you may be grateful. (Surah Al-Maidah 5:89)
❑ Unable to fast in ramadan - So whoever among you is ill or on a journey [during them] - then an equal number of days [are to
be made up]. And upon those who are able [to fast, but with hardship] - a ransom [as substitute] of feeding a poor person [each
day]. And whoever volunteers excess - it is better for him. But to fast is best for you, if you only knew. (Surah Al-Baqarah 2:184)
❑ Can be offered at any time in seeking the forgiveness from Allah
✓ Sadaqah Jâriyah, literally, “running charity,” has long-term benefit – water well, masjid, fruit tree, beneficial knowledge,
✓ Other forms of Sadaqah –
❑ Enjoining good, Forbidding evil
❑ Smiling
❑ To speak a good word is a charity
❑ To judge justly between two is a charity.
❑ Removing harm from the road

26. https://www.youtube.com/watch?v=9bylSTwC-Zk
https://cdn.zakat.org/wp-content/uploads/zakat-book-1.pdf
CIOGCZakatBookletFinal1_TitleCR.doc (zakatchicago.com)
https://www.hidaya.org/documents/mailers/HF_PracticalGuideforCalculatingZ
akat.pdf
https://raleighmasjid.org/files/Al-Huda%20Zakah.pdf
https://www.amjaonline.org/?s=zakat&post_type=all
https://islamqa.info/en
Zakat Calculator & Other Resources