Zakaah Workshop

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Presentation part of Zakaah Workshop held on 2nd January 2010 at Islamic Academy of Coventry. www.islamicacademycoventry.org

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Zakaah WorkshopPresented byIslamic Academy of Coventryon 2nd January 2010 : 

Zakaah WorkshopPresented byIslamic Academy of Coventryon 2nd January 2010 www.islamicacademycoventry.org

Today’s session (1) : 

Today’s session (1) What are Zakaatable assets?    Is Zakaah compulsory upon me?    The Nisaab Group discussions www.islamicacademycoventry.org

Today’s session (2) : 

Today’s session (2) Recipients of Zakaah Practical questions - Groupwork Answers to practical questions www.islamicacademycoventry.org

Today’s session (3) : 

Today’s session (3) Common Misconceptions Miscellaneous questions Q & A www.islamicacademycoventry.org

What is Zakaah given on? : 

What is Zakaah given on? Definition of Zakaatable assets which are:   Money (any currency)   Gold & Silver (not 9ct) Business goods (Items purchased with the sole intention of reselling)   Loans receivable (upon receiving the money) www.islamicacademycoventry.org

Less common Zakaatable assets : 

Less common Zakaatable assets Zakaatable assets are also:    Shares If purchased for capital gain, then the market value If purchased for dividends, then according to the % of net Zakaatable assets held by the company Agricultural produce Livestock www.islamicacademycoventry.org

What can be deducted? : 

What can be deducted? From the Zakaatable assets, we can deduct: Personal Loans/debts which are immediate Current instalments for deferred loans (e.g.mortgages) www.islamicacademycoventry.org

A Brief Example : 

A Brief Example www.islamicacademycoventry.org

Is Zakaah compulsory upon me? : 

Is Zakaah compulsory upon me? The ‘Nisaab Threshold’ Definition Purpose Only if you Are sane and mature Owned the Nisaab at the beginning of the year And still owned the nisaab at the end of the year* *Note: we can ignore any fluctuations in the interim www.islamicacademycoventry.org

The Nisaab amount : 

The Nisaab amount 87.48 grams of Gold Or 612.36 grams of silver Or Money/other Zakaatable assets equal to the current value of the gold or silver Nisaab, whichever is lower*. *Silver is the lower Nisaab these days www.islamicacademycoventry.org

Choosing the lower Nisaab : 

Choosing the lower Nisaab So, if: 87.48g of gold is valued at £2000, and 612.36g of silver is valued at £210 then the Nisaab will be equal to £210, not £2000. www.islamicacademycoventry.org

Setting the Nisaab date : 

Setting the Nisaab date Check bank statements/receipts etc Find out the date you first owned the Nisaab Convert that date to the Hijri date Keep the Hijri date fixed every year Use the market value of gold/silver/goods on the fixed date If you can’t find any records, then:- Fix a Hijri date yourself and stick to it each year Give a little extra each year to be on the safe side www.islamicacademycoventry.org

How to calculate the Zakaah : 

How to calculate the Zakaah First Calculate the Nisaab Calculate the value of 87.48g gold or 612.36g silver in £pounds Choose the lower of the two amounts as the ‘Nisaab amount’ Now calculate your Net Zakaatable Assets Value all your Zakaatable assets in £pounds Deduct any personal and immediate loans The total sum is called the NET-ZAKAATABLE ASSETS AMOUNT www.islamicacademycoventry.org

How to calculate the Zakaah (cont’d) : 

How to calculate the Zakaah (cont’d) If the final sum is less than the nisaab amount, Zakaah will not be compulsory But if it is more than the nisaab amount: Wait for 1 whole lunar year to pass Repeat the above calculation If the sum is still more than the nisaab, Zakaah will be compulsory on the full amount. Pay 2.5% of your total net zakaatable assets www.islamicacademycoventry.org

Zakaah/Nisaab timeline - Example 1 : 

Zakaah/Nisaab timeline - Example 1 www.islamicacademycoventry.org

Zakaah/Nisaab timeline - Example 2 : 

Zakaah/Nisaab timeline - Example 2 www.islamicacademycoventry.org

Extra info : 

Extra info 31.103g = 1 troy oz Therefore:- Gold Nisaab = 87.48g = 2.813 troy oz Silver Nisaab = 612.36g = 19.688 troy oz www.islamicacademycoventry.org

Group discussions (1) – 15 mins : 

Group discussions (1) – 15 mins Get into groups of 5 to 7 people Please discuss: Zakaatable assets What is included What isn’t included The Nisaab Its purpose/definition How to calculate it Gregorian/Hijri Date Beginning/end dates The Zakaah How to calculate it When you do/don’t have to pay it www.islamicacademycoventry.org

Recipients of Zakaah : 

Recipients of Zakaah Common types: The Poor The Homeless Those in large amounts of debt The general rules:- Intention of Zakaah should be made when giving the money Complete ownership should be transferred over to the recipient Recipients can’t have any type of wealth* (which is above their basic needs) equal to the Nisaab *‘Any type of wealth’ includes Zakaatable assets AND non-zakaatable assets (less any immediate debts) www.islamicacademycoventry.org

The Payer/Recipient : 

The Payer/Recipient www.islamicacademycoventry.org

‘Above a basic need’ : 

‘Above a basic need’ Examples of what is ‘above a basic need’:- Extra car or extra house Diamonds/other non-zakaatable valuables TVs Unused household goods/utensils/clothes Other items which do not restrict day to day life www.islamicacademycoventry.org

Three types of people : 

Three types of people www.islamicacademycoventry.org

Those who can’t receive Zakaah : 

Those who can’t receive Zakaah A Rich person (as defined earlier) Descendents of Banu Hashim (Prophet’s Family) The father/mother Grandfathers/Grandmothers and beyond Sons/daughters Grandsons/granddaughters and beyond Spouse www.islamicacademycoventry.org

Group discussions (2) – 15 mins : 

Group discussions (2) – 15 mins Get into groups of 5 to 7 Please discuss Recipients of Zakaah Non-recipients of Zakaah Difference in Nisaab between Payer and Recipient Raise any questions with the rest of your group Attempt examples 1,2,3 & 4 together based on what you have learnt so far www.islamicacademycoventry.org

Example 1 - Zaid : 

Example 1 - Zaid 1) Calculate the Nisaab to find out: Gold: £25 x 87.48g = £2187 Silver: 30p x 612.36g = £183.71 (Use £183.71 as it’s lower) 2) Zaid’s Net zakaatable assets are: £100 + £50 + £50 +£18 = £218 (£218 is more than £183.71 so Zakaah has to be paid) So, £218 x 2.5% = £5.45 will be given as Zakaah www.islamicacademycoventry.org Zaid last paid Zakaah on 1/09/1430. 1 year has passed since then. Does Zaid still have to pay zakaah one year on?

Example 2 - Amr : 

Example 2 - Amr 1) Calculate the Nisaab to find out: Gold: £30 x 87.48g = £2624 Silver: 25p x 612.36g = £153.09 (Use £153.09 as it’s lower) 2) Amr’s Net Zakaatable assets are: £300 + £20 + £10 -£200 = £130 (£130 is less than £153.09 So Zakaah doesn’t have to be paid) www.islamicacademycoventry.org Amr last paid Zakaah on 1/1/1430. 1 year has passed since then. Does Amr still have to pay Zakaah one year on?

Example 3 - Abdullah : 

Example 3 - Abdullah 1) Calculate the Nisaab: Gold: £30 x 87.48g =£2624 Silver: 25p x 612.36 =£153.09 (Use £153.09 as it’s lower) 2) Those of Abdullah’s assets which are Zakaatable or above basic needs are: £50 + £10 + £800= £860 (£860 is more than £153.09 so Abdullah can’t receive Zakaah) Note: The TV has to be included in the Nisaab as well for Zakaah Recipients, as it is above one’s basic needs. www.islamicacademycoventry.org Abdullah doesn’t have to give Zakaah, but he would like to know whether he can receive it.

Example 4 – Hamid : 

Example 4 – Hamid 1) Nisaab is £210 2) Hamid’s Net Zakaatable assets: £2,000 – £600 = £1,400 (£1,400 is more than £210, so zakaah will be compulsory) So, £1,400 x 2.5%= £35 will have to be given as Zakaah Note: Only loans which are immediate can be deducted www.islamicacademycoventry.org Hamid has just had a Mortgage* and would like to know if he has to pay Zakaah. He last paid it on 1/2/1430. Nisaab has already been calculated as £210. Note:- The Loan from the bank was for £80,000 £600 has to be paid to the bank on the mortgage each month *Interest is a very grave sin and should be avoided at all costs

Common Misconceptions : 

Common Misconceptions “The ‘Nisaab amount’ can be excluded from the  zakaatable assets”-wrong “Zakaah can be given on behalf of mature children/wives without their consent” -wrong “Zakaah may be dispensed by merely feeding the poor” -wrong “Zakaah is a form of Islamic tax” –wrong “We can use the price we bought the gold, silver or goods for”-wrong www.islamicacademycoventry.org

Common Misconceptions : 

Common Misconceptions “Zakaah may be used to build Islamic  institutes” -wrong “Zakaah has to be given on items which are not used/needed” -wrong “Zakaah has to be given in Ramadhan”-wrong “My Zakaah has been dispensed once I’ve given it to the Zakaah collector” –wrong www.islamicacademycoventry.org

Miscellaneous questions : 

Miscellaneous questions What if someone who hasn’t paid their Zakaah dies? Their Zakaah will not be given unless they have made a wasiyyah (bequest) and the amount to be given doesn’t exceed 1/3 of their estate. If wasiyyah hasn’t been made, the heirs may dispense it out of their own inheritance voluntarily Having just jewellery and no cash? Part of the jewellery will have to be pawned and the Zakaah dispensed through the cash proceeds What about immature children? Do we have to give Zakaah for them? No (but this is as long as they are the rightful owners of the Zakaatable assets) Does Zakaah have to be given as money? No, it may also be given as any item of value and use www.islamicacademycoventry.org

Miscellaneous questions : 

Miscellaneous questions Can Zakaah be given in advance? Yes, but an adjustment will have to be made for any increase in Zakaatable assets and their value on the Fixed date Can Zakaah be given after its date? Yes, but again, adjustments will have to be made for any change in zakaatable assets since the Fixed date Can you disguise Zakaah as a gift? Yes, but intention of Zakaah needs to be made when transferring ownership to the recipient Can a very large sum of Zakaah money be given to one poor person? Yes, as long as the person him/herself doesn’t become an owner of the Nisaab. In this case it the Zakaah will be dispensed but undesirably so. There is more flexibility if the recipient is the breadwinner in that the limit is for the dependents to become owners of Nisaab www.islamicacademycoventry.org

Any other Q & A : 

Any other Q & A www.islamicacademycoventry.org

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