Posts

I Have an Income but I Never Possess the Nisab. Should I Pay Zakat?

Answered by Ustadh Salman Younas

Question: Assalam aleykum

I have learned that nisab is the amount of wealth that one has kept for one lunar year. What do you do if you never have that? Is one then exempt from paying zakat?

Answer: assalamu alaykum

In order for zakat to be obligatory upon an individual, he must possess a minimal zakatable amount (nisab) at the beginning and at the end of his zakat year. If you never possess such an amount, zakat will not be obligatory upon you.

For some general guidelines on calculating zakat please see:

Zakat: How to Calculate & Whom to Give

[Ustadh] Salman Younas

Checked and approved by Shaykh Faraz Rabbani

Ustadh Salman Younas graduated from Stony Brook University with a degree in Political Science and Religious Studies. After studying the Islamic sciences online and with local scholars in New York, Ustadh Salman moved to Amman. There he studies Islamic law, legal methodology, belief, hadith methodology, logic, Arabic, and tafsir.

Can I Follow the Zakatable Minimum (Nisab) of Gold to Pay My Zakat?

Answered by Ustadh Tabraze Azam

Question: Assalam ‘aleykum,

1) Which nisab should I use for my Zakat? On (e-nisab.com) there are 3 nisab values: Gold, Silver, and Hanafi. Can I follow the zakatable minimum of gold?

2) I haven’t paid attention to nisab and how much wealth I possessed for the past few years. How should I go about calculating how much I owe in Zakat?

Answer: Wa alaikum assalam wa rahmatullahi wa barakatuh,

I pray that you are in the best of health and faith, insha’Allah.

(1) Yes, you can follow the zakatable minimum (nisab) of gold.

(2) You should make a reasonable judgement and then act accordingly.

Please also see: Zakat: How to Calculate & Whom to Give and: Is Your Zakat Due? – A Reader and Resources on Giving Zakat

You can make a Zakat eligible donation here.

Your zakat eligible donation will support deserving scholars and students — through scholarships and emergency assistance.

And Allah alone gives success.

wassalam,

Tabraze Azam

Checked & Approved by Shaykh Faraz Rabbani

Is Zakat Due When My Mortgage is Greater Than My Assets?

Answered by Ustadh Tabraze Azam

Question: When I calculated all my assets my liabilities are greater due to my house mortgage payment.  In this case, zakat is due on me?

Answer: Assalamu alaikum wa rahmatullah,

I hope you are in the best of health and spirits, insha’Allah.

A house mortgage is considered a long-term debt. As such, one may only deduct the immediate, upcoming payment. [`Ala al-Din `Abidin, al-Hadiyya al-`Ala’iyya]

For example, consider the following scenario:

[1] Nisab is $5,000 (for an accurate figure, see: e-nisab.com)

[2] You have zakatable assets worth $10,000;

[3] And a long term mortgage of $250,000 of which one pays monthly installments of $2,500;

One deducts the immediate payment of $2500 and pays zakat on $7,500.

On the other hand, if one’s immediate payment was $6,000, one would be left with $4,000 which is below nisab and hence non-zakatable.

See also: Zakat & Long-Term Debts

And Allah alone gives success.

Wassalam,

Tabraze Azam

Checked & Approved by Faraz Rabbani

Do We Pay Zakat on Gold If We Don’t Own the Nisab (Minimum Zakatable Amount)?

Answered by Ustadh Salman Younas

Question: I’m confused on zakat regarding my wedding rings. I have read that to be liable to pay zakah on gold you must have the nisab which is about 85 grams. So i went to weigh my rings and its only 6 grams. Does the market value of the gold matter? Also, I read conflicting information on whether there is zakat on precious stones. Some advice would be appreciated on these matters.

Answer: wa `alaykum assalam

The zakatable-minimum (nisab) is 87.48 grams of gold. Zakat is due on a yearly basis when a morally-responsible Muslim possesses this amount above and beyond his debts and immediate expenses, and a complete lunar year passes over it.

The important thing to note here is that when calculating one’s Zakat one calculates all his zakatable assets together. “Zakatable assets” include:

(a) Cash – whether in hand or in the bank,
(b) Gold and Silver,
(c) Money lent out,
(d) Trade goods,
(e) Stocks, and
(f) Agricultural produce.

After one calculates the above, one deducts:

(a) Debts, and
(b) Immediate expenses.

Thus, for example, if we assume that 87.48 grams of gold is equivalent to $3000 then this is considered the zakatable-minimum (nisab). A person will then look at all of his zakatable-assets to see whether they reach this value when considered together. So, if a person possesses $1000 in cash, $1000 of gold, and $3000 in trade goods then his total zakatable assets amount to $5000 (supposing he has no money lent out, stocks, or agricultural produce). However, he also has a debt of $500 and his immediate monthly expense amount to $500 also, which will be subtracted. Thus, his total zakatable wealth is $4000. This is above the zakatable-minimum (nisab), so the obligation to pay Zakat will commence.

If one possessed this amount on the 1st of Rabi` al-Awwal then this is when his Zakat year starts. On the 2nd of Rabi` al-Awwal of the next year, he will look at the value of his zakatable-assets again. If they are above the zakatable-minimum (nisab), he will have to pay 2.5% of their combined value as Zakat. Thus, what is taken into consideration is the amount one possesses above the zakatable-minimum (nisab) at the end of one’s Zakat year. This is the amount Zakat is due upon.

As you can see from the above, the amount of gold this person has does not reach the zakatable-minimum when considered alone. However, when calculating Zakat, all zakatable assets are combined to see whether their total value reaches the zakatable-minimum (nisab), even if they may not reach this value when considered separately.

I hope this clarifies the issue for you.

Salman

Checked & Approved by Faraz Rabbani

Can Students of Islamic Knowledge Be Recipients of Zakat?

Answered by Shaykh Faraz A. Khan

Question: For students who want to travel to study Arabic and Islamic studies so that they can become an Imam or serve the Muslim community with their knowledge, can they be recipients of Zakat? If yes, does the Zakat only go to their direct studies such as classes and books, or can the Zakat go to all of their expenses including living expenses and travel expenses.

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health states.

Yes, students of Islamic knowledge can be recipients of zakat. [Tahtawi, Hashiyat Maraqi Falah]

If they are not legally poor, they can be supported if they study Islamic knowledge full-time. Otherwise if they are legally poor, they can be supported in any case. To be legally poor means that one owns less than the quantum (nisab) of zakat, which can be determined here: http://www.e-nisab.com/

This criteria of ‘student of knowledge’ — that they study full-time if they possess nisab, or engage in at least some study if they possess less than nisab — is consequential as well if one appoints an agent (wakil) with instructions to give one’s zakat to a student of knowledge.

In terms of which expenses it can be spent on, the general rule of zakat is that there must be transfer of ownership (tamlik), such that the recipient unconditionally owns the wealth given to them. Once someone owns wealth, he may use it however he sees fit. [Haskafi, Durr al-Mukhtar]

Of course on a practical note, one should only support students who are committed and serious in their studies, as lazy people who are not committed might take advantage of financial support.

And Allah knows best.
wassalam
Faraz A. Khan

Checked & Approved by Faraz Rabbani

Distribution of Gold and Zakat

Question: A mother owns more than the nisab amount of gold, but has been keeping many of the gold items with her daughters’ weddings/adulthood in mind. If she simply distributes the gold items amongst her daughters before their weddings, and thus none of the ladies of the house now own a nisab amount of gold, should she feel guilty in any way as now zakat is not due upon her?

Answer
: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states.

This would be perfectly fine; she would not have to feel guilty in any way, as long as her intention is not to avoid paying zakat.

By distributing the gold in such a manner, she has gifted each daughter their respective gold such that they are now the owners of the gold, and the mother no longer owns the gold. Each daughter is fully entitled to do with her gold whatever she pleases, as it is her property alone.

Lastly, it must be kept in mind that the gold one owns must be added to one’s cash and other zakatable assets when determining whether or not one has nisab.

[Maydani, Lubab]

And Allah knows best.
wassalam
Faraz

Checked & Approved by Faraz Rabbani

Related Answers:

Zakat Answers

Paying Zakat vs. Paying Off a Debt

Answered by Shaykh Faraz A. Khan

Question: I have some jewellery which meets the nisab of zakat. However, I also have a credit line loan. Last year, when I calculated the zakat on jewelry it came out to be around $800.

 

My credit line loan is $7,000. Am I obligated to give the $800 in zakat or can I pay it towards my loan?

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states.

Firstly, keep in mind that for zakat, zakat is not due on all jewelry, but just one’s gold and silver. Also, to see if you meet nisab, you need to add the value of the gold and silver to your cash (as well as trade assets if you own a business).

With respect to your credit line loan, if this is a short-term debt (i.e., due within a year), then you would deduct that entire amount before seeing if you have nisab or not.

If it is a long-term debt (due after one year), then you would deduct the upcoming monthly installment, or at most up to one year. Aside from that amount, you would see if the rest met nisab or not to see if you owe zakat.

Please see related answers on SeekersGuidance, such as:

Zakat & Long-Term Debts

How to Calculate Zakat When Paying or Receiving Loan Payments

Paying Zakat on Gold, Loans, and Gifts

Zakat Questions: Resetting Start Date, Miscalculations, and Debt Deduction

[Kasani, Bada`i al-Sana`i; Ibn Abidin, Radd al-Muhtar]

And Allah knows best.
wassalam
Faraz

Checked & Approved by Faraz Rabbani

Zakat Questions: Resetting Start Date, Miscalculations, and Debt Deduction

Answered by Shaykh Faraz A. Khan

Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states.

(Q1) I converted to Islam on May 6, 2009. I already met the nisaab amount at the time. However, as I did not know enough about zakat and Islam in general at the time, I set my “start date” for the beginning of my first zakat year as the first date of Ramadan that year (end of August, 2009). Is it permissible to do this, or should I have started on May 6th, 2009?

 

I paid zakat at the end of that first lunar year, and now I am calculating my zakat for the end of my second lunar year. I am unfortunately already late paying my zakat (it should have been paid at the beginning of Ramadan based on my calculation). So I am not sure how I would go back and calculate zakat as of August 1, 2011?

Answer: You should have started on May 6, 2009, which based on a quick conversion I did corresponds with [Wednesday 11 Jumaada al-awal 1430 A.H.] (please confirm on your own…there could be a difference of one day or so).

Try your best to ascertain how much zakatable wealth you owned after 1 lunar year from that date, i.e., 11 Jumaada al-awal 1431 AH, and pay the difference if it is more than what you paid on Ramadan 1, 1431AH (2010). A sincere educated guess/attempt is sufficient inshaAllah. From now on, every year, use the Islamic date corresponding to May 6, 2009.

(Q2) In addition, I now realize I miscalculated my previous year’s zakat because I deducted the full amount of a long term debt (student loan)…so now I probably owe more zakat due to this miscalculation…but it would be very difficult to piece together the numbers from back then to calculate what I should have owed…what should I do?

Answer: Again, try your best, estimate, and pay the difference. A sincere educated guess/attempt is sufficient inshaAllah.

(Q3) This is my current situation:

I have a student loan and still owe $15,000 as of today. I must pay minimum monthly installments of $320. However, I just went back to school as of August 2011 and am not required to make mandatory payments while in school. But interest does still accrue on a portion of the loan while I am in school. Also, I still plan to make monthly payments to pay off the loan faster and not allow interest to accrue.

 

I now know I cannot subtract the entire value of my student loan when calculating zakat…I can only subtract the most immediate installment due because it is considered a long-term debt. Does this mean I subtract the most immediate monthly installment, or the amount expected to be paid over the course of the coming year? How does this work now that technically my loan is deferred and as of August 2011, payments are technically not required? (though interest would accumulate)

Answer: You may still deduct the installments since you are currently paying it back. It remains a debt that you owe, even if they are not currently requiring payment. You should deduct the upcoming monthly installment, but may at most deduct the entire year.

(Q4) Currently my main assets are everything in my bank accounts (which does exceed the amount of the loan…but because I am now a PhD student, I know I will have major expenses coming up, so I do not want to pay off the entire loan amount right now).

 

My gold jewelry, i.e. wedding rings, shouldn’t count under assets because I do not think it exceeds 87 grams of gold (as per my understanding of Hanafi fiqh…I think Shafis/Malikis say women’s jewelery does not count at all and one does not pay zakat on it…is this the correct understanding?)

Answer: Because you have more than nisab in cash, you must also count all your gold and silver, regardless of its amount. The 87g criteria is if one only has gold…i.e., that is how much gold equals nisab. But gold and cash are combined, along with silver: once nisab is reached by any/all of these, then one counts all the cash/gold/silver one owns. So because you have nisab, count all your gold and silver.

(Q5) I am confused about what expenses can be deducted. My immediate expenses would be rent, utilities, food, and an overdue estimated tax payment that I still owe to the government. Do I subtract a month’s worth of expenses for whatever the coming month is? Year’s worth? None at all? And what about assets in terms of wages I expect to receive in the coming month/year? Also, what about expenses that are not strictly necessities like food/water, but which will be required of me for my current academic program (some expenses for research abroad that are not covered by my fellowship, items I am required to purchase, books, etc.)?

Answer: Normally, the only time one deducts expenses is if the bill has already come in…that is, once it is due. Based on this, the tax payment that is overdue would be deducted. The entire amount would be deducted since it is already overdue.

With regards to the other expenses you mention, contemporary scholars mention that one can deduct known upcoming expenses for the month–or up to a year of known expenses (e.g. medical bills, etc… of significant expenses), but only doing this when there is financial difficulty by not considering them.

Lastly, upcoming wages/assets are not given consideration in zakat…all that matters is what you own when the due date falls.

[Kasani, Bada`i al-Sana`i; Ibn Abidin, Radd al-Muhtar]

And Allah knows best.
wassalam
Faraz

Checked & Approved by Faraz Rabbani

How Do You Determine How Much You Pay for Zakat When You Constantly Receive New Wealth During the Year?

Answered by Sidi Tabraze Azam

Question: If one has to pay Zakat today for example, though has received more gold throughout the year, does one give Zakat on the total of the gold at hand at the time of when Zakat is due or does one calculate one year from the “new” gold is received?

Answer: Wa alaikum assalam wa rahmatullahi wa barakatuh,

I pray that you are in the best of health and faith, insha’Allah.

According to the Hanafi school, one adds the wealth gained during the year to the wealth which is already in one’s possession. [Shurunbulali, Maraqi al-Falah; ShaykhZada, Majma` al-Anhur]

What counts is what is in one’s possession at the end of the lunar year (hawl). Practically, even if one was gifted gold/silver, money or the like, the day before zakat was due, one would be obligated to include it within one’s zakat calculations (i.e. the next day).

And Allah knows best.

Wassalaam,

Tabraze Azam

Checked & Approved by Faraz Rabbani

Related Answers:

How do I Calculate Zakat on Gold and Silver When the Value Increased After I Invested In It?

Zakat: How to Calculate & Whom to Give

The Nisab for Sadaqat al-Fitr

Answered by Shaykh Faraz A. Khan

Question: I was wondering what the amount of nisaab (hirman zakaat) needed to be reached for sadaqah al-fitr is in dollars?

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and faith.

Based on today’s market value of gold (7/13/2011), the nisab amount in US dollars is $4682.95.

[Taken from http://www.e-nisab.com/]

One is obliged to pay sadaqat al-fitr if one owns nisab hirman al-zakat, i.e., the above amount in any form of wealth aside from outstanding debts and one’s basic personal needs (such as house of residence, clothing, furniture, personal vehicle, etc). [Shurunbulali, Ascent to Felicity]

And Allah knows best.

wassalam
Faraz

Checked & Approved by Faraz Rabbani