Alms and Charity: Virtues of Zakat: Part 12

POSSESSIONS ARE SUBJECT TO ZAKAT: Part 1

WHICH POSSESSIONS ARE SUBJECT TO ZAKAT?

The issue of trying to determine how much zakat needs to be spared from a certain item, and leveling what proportion, are all predicated upon the Qur’an and Sunna. Despite the Qur’an’s ardent emphasis on zakat, it has no specific pronouncement on the amount of nisab, which has been, in turn, explained by the Prophet (upon whom be peace).

The possessions subject to zakat can basically be encapsulated as livestock, moveable and immoveable assets, mines, agricultural harvests, and commercial merchandise, all of which have different limits and amounts for nisab. In brief, the nisab for each item and the amount of zakat that needs to be spared from the item vary according to the item’s status. “One-fortieth” has generally been a pervasive measure among the public, although this calculation only pertains to commercial merchandise and sheep. Thus minerals, mines, agricultural harvests, and various livestock all have been assigned various amounts and proportions of nisab.

HOW IS ZAKAT GIVEN ON MOVEABLE GOODS?

The zakat on gold and silver

Gold and silver, valuable assets in commercial life as items of jewelry, also cater to the ornamental needs of certain individuals, though it is forbidden for men to use gold jewelry. Regardless of commercial or ornamental utilization, those in possession of a nisab’s worth of gold or silver are required to pay its zakat, as attested to by the Qur’an:

O you who believe! Indeed many of the rabbis and priests devour the wealth of people by false means and debar them from the way of God. Those who hoard up gold and silver and do not spend it in the way of God, give tidings unto them of a painful punishment. The day shall come when their treasures shall be heated in hellfire; and their foreheads, sides, and backs shall be branded with them (saying), “Here is that treasure that you hoarded up for yourselves; taste, now what you were hoarding up.”(Tawba 9:34-5)

In similar fashion, the Messenger of God has provided the following illustration: “There is no wealthy withholding the zakat of the gold and silver that will not have these possessions brought to them in the Day of Judgment, in the form of burning panels, additionally heated in the hellfire,

branding their sides, foreheads and backs. Each time these panels cool down, they will be reheated to return the torment, until the end of judgment, in a day equivalent to fifty thousand days. Then they will be shown the way, either to Paradise or to Hell.”

As it is known, gold and silver were the currencies in circulation during the era of the Noble Messenger and the ensuing centuries, evaluated as both nuggets and jewelry. Even though in this day and age, they are predominantly no longer utilized as currencies, they still occupy an undoubtedly important place as economic investments, which can be changed into currency with ease if the need arises. Moreover, their current use as jewelry is quite pervasive throughout society. Irrespective of the intention one has in possessing such goods, one is compelled to pay zakat on them once they have accumulated to a certain level.

Various figures exist in relation to the definition of a nisab of gold and silver, stemming from diverse interpretations of the measurements used during the time of the Prophet (upon whom be peace) in different areas, or simply put, according to traditional norms. The nisab of gold, however, has generally been identified as 85 grams and that of silver as 595 grams. According to a narration of Abu Said al-Hudri, the Messenger of God stated that zakat is not required for silver less than 5 uqiyya’s (200 dirhams=595 grams). Anas ibn Malik, an official zakat collector during the era of Caliph Umar, asserted that he had been instructed to take ½ a dinar from every 20 dinars, a practice similar to that later followed by Caliph Ali.

Taking the hadith and subsequent applications of the Companions into consideration, scholars have unanimously pinpointed the nisab of gold and silver as being 85 grams and 595 grams respectively, with an overall proportion of 2.5%.

The zakat on cash, checks and bonds

The banknotes in circulation today do not essentially possess value; rather they are simply papers assigned a nominal value. Though from the purely physical aspect they hold no resemblance to the gold and silver used during the time of the Prophet, they perform the same function. To be more precise, banknotes or cash have taken the place of gold and silver in commercial transactions. Thus, it is only logical that cash is evaluated according to the role it plays in trade; therefore, it is also integrated into the calculation of zakat, with a 2.5% ratio. Thus, a person in possession of checks or bonds equivalent to at least 595 grams of silver or 85 grams of gold must offer 2.5% of it as zakat, owing to the fact that nowadays, these have become the standard for the exchange of goods, as well as a potential means for buying.

The zakat on shares or investments

The practice of selling shares, propounded by companies within great investments to spread the capital among a large base and to incorporate into the commercial life the contribution of a multitude of people, can be assessed in two forms. The first denotes the capital invested during the beginning phase of a company; the second indicates the investments that exist in the company as property or wealth.

Pertaining to the first type that involves investments in the foundation, the building, and machinery, Hanafi scholars nurture a reluctant attitude in regards to subjecting it to zakat given that the investments end there. The Majalla Committee, organized by the Ottomans in the 19th century to systematically complete an official Islamic Code of law, nonetheless inclined towards the Malikis and opted in favor of giving zakat in such a situation, a verdict perhaps more fitting in terms of disseminating vigor in an otherwise dead investment. The investments within the company, on the other hand, must be assessed as commercial merchandise, with a 2.5% ratio of zakat, in that they can also be cashed in if required.