Understand the Meaning & Importance of Zakat
According to Syarak
Zakat is the act of giving a specific portion of wealth at a prescribed rate according to certain conditions, to be distributed to specific groups of people.
Linguistic Meaning
It is a derivative of the word (زَكَى) which means pure and fertile, including clean, blessed, prosperous, and good, referring to zakat wealth, the payer of zakat, and the recipient of zakat.
Who is Obliged to Pay Zakat?
A person who is obliged to pay zakat is called muzakki. “A Muslim who meets certain conditions is obliged to fulfill this third pillar of Islam.
Islam
Only asset owners who are Muslims are obligated to pay zakat.
Independent
Free from the bonds of slavery.
Full Ownership
A person’s lawful ownership of an asset throughout the haul, with full independent authority to manage that asset.
Reaching the Nisab
Nisab is the minimum amount of ownership of a certain asset that becomes a requirement for zakat to be obligatory on that asset.
Reaching the Haul
Haul is a period of one year or 12 months according to the Hijri calendar, during which continuous ownership must exist.
What is nisab?
Nisab is the minimum value of wealth that a Muslim must possess before being obligated to pay zakat. This value is measured in certain items, such as grams of gold or silver. If a person’s wealth reaches or exceeds the nisab, they are required to pay zakat as a condition of fulfilling this pillar of Islam.
Does the nisab change throughout the year?
Nisab can change depending on the type of wealth and fluctuations in the current market value.
The Minimum Amount Of Wealth A Person Must Possess To Be Obliged To Pay Zakat.
Types of Zakat
Zakat Fitrah
Zakat on oneself, which is obligatory on every capable Muslim male and female, according to the prescribed conditions.
Zakat on Wealth
Zakat imposed on specific wealth and can be paid at any time. The rate of Zakat on Wealth and Income is 2.5% of the total value.
Zakat on Income
Income wealth refers to all types of wages, allowances, payments, or earnings obtained from work or effort.
Business Zakat
Business zakat is the zakat that must be paid from the assets of a business.
Zakat on Savings
Currency is obliged to be subject to zakat because it can be used in transactions just like gold and silver.
Investment Zakat
Zakat that must be paid by shareholders or company owners who share in the profits or losses.
Zakat on KWSP
Zakat imposed on a person’s income earned from their employment that is contributed to the KWSP.
Zakat on Gold
Zakat imposed on gold in any form, such as jewellery or investment, when it reaches the nisab and haul.
Crypto Zakat
Cryptocurrency is a currency created based on Blockchain technology and digital technology.
Zakat on Paddy
Paddy zakat must be paid on the NET PROFIT from the sale of paddy (paddy sale proceeds minus the cost of production).
Fidyah
Fidyah is a penalty payment for individuals who are unable to make up their missed Ramadan fasts before the next Ramadan arrives.
Zakat on Silver
Zakat imposed on silver, whether in the form of jewellery, coins, or silver savings, when it meets the nisab and haul.
