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ZAKAT IN ISLAM
THE DEFINITION AND
IMPORTANCE OF ZAKAT
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Presentation outline
Definition of zakat
The importance of zakat
Conditions for zakat
People entitle to receive zakat
Methods to determine the
sources of zakat
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Islamic Financial Planning includes:
 Savings
 Zakat Planning
 Debts – Financing & Credit
Cards
 Investment
 Takaful
 Estate Planning
Islamic Financial Planning includes:
• Discipline of wealth management:
 Protect
 Preserve
 Accumulate
 Distribute
Main difference between saving in Islamic
banking & conventional banking?
ABSENCE OF INTEREST!
• Profit instead of interest!
• So how does it work?
• Concept of Guaranteed Custody or
Profit Sharing
• Profit rate is not fixed; depends on the
returns of the investment (ROI)
INTEREST vs PROFIT
INTEREST
PROFIT
Rate based on the amount of
money involved
Rate based on the amount of
profit obtained
Payment is fixed
Distribution depends totally on
the profitability
Amount does not increase even Distribution of profit increases
if profit obtained manifold in accordance to the amount of
profit obtained
SAVINGS : ISLAMIC PERSPECTIVE
• Islam does not favour excessive
spending
• Execessive spending is HARAM
• Nor does it favour hoarding
(penimbunan) of money.
• Therefore we need to find the right
balance : Spend, Donate, Save
Why Savings.......???!
• Basic Needs – Health,
Food, House, Vehicle,
etc.
• Zakat (Wajib)
• Pilgrimage/Hajj (WAJIB)
• Umrah (SUNAT)
• Qurban (SUNAT)
• Peace of Mind (HARUS)
• Financial Independence
• Aid for Others (SUNAT)
• Charities (SUNAT)
The History of zakat payments
• Prior to Hijrah, zakat is only compulsory to those
wealthy people who are close with the Prophet
s.a.w.
• At that time, the obligation to pay zakat is
based only on their awareness, willingness,
discretion.
• An organized system of zakat (for instance
having the conditions for nisab, rate and haul )
was only applied after the 2nd year of Hijrah.
Definition of zakat
• It is considered to be a personal
responsibility for Muslims to ease economic
hardship for others and eliminate inequality.
• It is obligatory for all who are able to do so.
• Growth (in goodness) or increase, purifying
or making pure of one’s wealth.
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Definition of zakat
• Literally
– cleansing or purifying of something from dirt or filth
(cleaning)
– Praise, growth and increase
» References: Dr Yusof Qardawi
• Theologically
– Spiritual purification resulting from paying zakat
• Legally / Syariah
– Transfer of ownership of specific wealth to specific
individual (s) under specific conditions
– Religious payment made by a Muslim from his wealth or
income or business or crops or animals in the form of
money or crops or animal according to certain rate to the
zakat authority that is Pusat Pungutan Zakat (PPZ).
The Importance of Zakat
 One of the five pillar of Islam
1.
2.
3.
4.
5.
Syahadah - is a statement professing monotheism and
accepting Muhammad as God's messenger.
Solat - Pray 5 times a day
ZAKAT- giving is the practice of charitable giving by Muslims
based on accumulated wealth
Sawm / Siyam – Fasting in the month of Ramadhan
Hajj - is a pilgrimage that occurs during the Islamic month of
Dhu al-Hijjah to the holy city of Mecca,
 Avoid stinginess
 Encourage donations
 As a mean to express thanks to Allah
 Establish sympathy and avoid jealousy
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Zakat from the perspective of the
Islamic Law
• Zakat is an important duty for Muslim as mentioned
in the Al-Quran: "Keep up prayer and pay zakat".
• While prayer is a physical form of worshipping Allah,
zakat is a material form.
• Zakat is compulsory :
"Take from their wealth charity (alms) to purify them
and to cleanse them thereby, and pray for them."
[At-Taubah: 103]
Dalil of zakat
• It is considered to be a personal
responsibility for Muslims to ease economic
hardship for others and eliminate inequality.
• It is obligatory for all who are able to do so.
• Growth (in goodness) or increase, purifying
or making pure of one’s wealth.
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Dalil in Hadith
In one hadith from Bukhari, Abu Hurairah (r.a.) narrated
that the Prophet SAW said:
"Whoever is made wealthy by Almighty Allah and
does not pay the zakat of his wealth, then on the
Day of Resurrection his wealth will be made like a
bald-headed poisonous male snake with two black
spots over the eyes. The snake will encircle his neck
and bite his cheeks and say, 'I am your wealth, I am
your treasure'. "
Like prayer, Zakat
is from amongst
the basic
principles of Islam
and not paying
your Zakat is a
major sin.
Allah (SWT) said,
“He [Pharaoh] will go before his
people on the Day of Judgment, and
will lead them into the Fire.” (Surah
Hud : 98)
Allah (saw) warns those who
refuse to pay the Zakat:
Allah (SWT) tells us in the Quran:
“They who hoard up gold and silver and
spend them not in the way of Allah,
Announce to them a painful torment O
Muhammad (saw) On the day when it all
will be heated in the fire of hell, and their
foreheads and their flanks and their backs
will be branded with it, (and it will be said
to them). This is the treasure which you
hoarded for yourself, now taste of what
you used to hoard.” (At Taubah:34-35)
The first Muslim
Caliph Abu Bakr AsSiddiq (r.a.), said:
"By Allah (SWT), if they
refuse to pay me (even) a
bridle which they used to
pay the Messenger of
Allah (pbuh), then I will
fight them because of
their refusal." [Muslim]
In another hadith by
Abu Dawud, the
prophet s.w.t. said:
“Allah has made zakat
obligatory simply to
purify your remaining
property, and He made
inheritances obligatory
that they might come to
those who survive
you.”
The main aims of zakat
The worship to Allah for all His bounties to mankind
•Al-Baqarah: 267 “Oh ye believe! Give of the good
things which ye have (honorably earned). And of
the fruits of the earth which we have produced for
you..”
Assist the poor and the needy
•Al-Dzariyat: 19 “and their wealth and possessions
(was remembered) the right of the (needy)..”
•Act as a mechanism to distribute wealth
Purify one’s heart and self from being stingy
•Al-Taubah: 103 “Of their goods take alms. That so
thou mightiest purify and sanctify them..”
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CONDITIONS FOR ZAKAT
1. Islam.
2. Wise.
3. Genuinely owned-owner’s asset or asset
free of claims by others.
4. Productive assets -capable of generating
profit or revenue and net cash inflows:Cash
in hand,Cash at bank,Stocks, shares, bonds,
and securities,Inventories of finished
goods, Rentals, Net Receivables.
5. Surplus assets- its value must equal to or
above a minimum zakat-able(nisab).
6. Full year’s possession (Haul).
7. Fullfil the nisab- a given quantity for the
period of an entire year.
People Eligible to pay Zakat
Muslim
Independent
Absolute ownership
Nisab
Haul
Purpose of business
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1.
2.
3.
4.
5.
6.
7.
8.
People Entitle to Receive Zakat /
Benefeciaries of Zakat
The Needy/ Poor/Fakir / Fuqara’ - Income
is less than 50 percent of daily needs.
Miskin (Masakin) - Just sufficient to
finance basic needs.
Amil - The one with authority / responsible
to collect zakat.
Muallaf - Individual who convert to become
Islam.
Fisabilillah - Individual involve with
activities to defend and strengthen Islam.
Ibnu Sabil - Refugees, homeless,
Orphanage Muslim.
Gharmin - Suffered many debt and unable
to settle them.
Riqab – Slave, after release from the
owner.
Discussions on the ISSUES: Are there
8 or 7 Benefeciaries???
 Some states in Malaysia have only 7
beneficiaries since nowadays there are no
more slaves (captives).
 However, there are other states which still
maintain the number of beneficiaries of 8
people.
 The reason - because it is stated in the
Holy Quran that there are 8 beneficiaries
of zakat.
 Due to that, ar-riqab is implied as zakat for
those who would like to free themselves
from ignorance for instance zakat paid to
people who would like to further their
studies
Conditions for becoming AMIL
 Muslim
 Pious person (orang soleh)
 Mukallaf (competent person who is in full
possession of his faculties)
 A freedom man (not a slave)
 A fair and just person
 Does not come from the descendants of
the Holy Prophet (PBUH)
 Trustworthy
 Is not a blind person
 Is not a deaf person
 Male
MUKALLAF
• Mukallaf ialah seorang yang telah mencukupi syarat untuk
diberikan taklif Syarak (yakni tuntutan dan kewajipan Syarak).
• Orang yang mukallaf wajib mematuhi ketetapan agama dan
setiap perbuatan dan perlakuannya tertakluk dengan hukum
yang telah ditetapkan oleh agama sama ada wajib, haram,
harus dan sebagainya tadi.
• Syarat-syarat mukallaf ialah:
1. Telah sampai umur (yakni baligh)
2. Memiliki akal yang waras
3. Sampai dakwah kepadanya
4. Sempurna pancaindera, khususnya penglihatan atau
pendengaran.
Methods to determine the sources of
zakat





Qiyas
Wealth
Al-Nama Binafsih
Al-Mal al-Nami
Favour the poor and the needy
QIYAS
 A method that will be used by the Islamic
jurists and scholars in determining the
shariah practice if the subject /case is not
mentioned in the Holy Al-Quran, Hadith
or consensus (ijmak).
 Qiyas is a practice to imply a subject with an
existing shariah treatment.
 The use of Qiyas in zakat is encouraged and it has
been widely practised by the Islamic jurists. For
instance, employment income is subject to zakat
because it is similar to gold and silver. Therefore,
the rate and the haul are equivalent to the rate and
haul of zakat on gold and silver
WEALTH
 Taken from several hadith :
 For instance, as narrated by Mu’az bin
Jabal, the holy Prophet s.a.w had
instructed his amil to inform the Yemen
people that zakat must be paid by the
wealthy people to be distributed to the
poor and the needy.
 Due to this, there is an opinion that
says zakat is payable on all wealth,
irrespective of the physical form of the
wealth.
Al-Nama Binafsih
 This is a method to zakat wealth based on the concept of “productive
wealth expansion”
 Those wealth or property which could in nature expand or grow by
themselves for instance the agricultural produce such as paddy will
fall under this category of wealth.
 There is no haul condition to be fulfilled for this type of wealth.
Zakat is payable once the wealth is gained and the quantity is enough
to meet the nisab.
 Imam Nawawi and some Islamic scholars such as Ibn Abbas, Ibn
Mas’ud and Muawiyah for instance suggest that zakat on employment
should follow the method of Al-Nama Binafsih.
 Thus, according to them zakat on employment income is payable on
the day it is received provided that it meets the nisab.
 The zakat is imposed based on the method it is gained and not the
type of wealth (even though the wealth is received in the form of
money)
Al-Mal al-Nami
 This is another method to zakat wealth
based on the concept of “productive
wealth expansion”.
 However, it is imposed on wealth which is
gained from property or wealth which
could not grow by itself for instance like
business wealth.
 Therefore, zakat is ony payable when it
meets the haul and the nisab.
 For instance zakat on business income will
only become payable if it meets the haul
and nisab.
Favour to the Poor and Needy
 This principle is being used by the
scholars if there are two reasons from two
different schools of thought to pay zakat
on the same wealth at the same time.
 Therefore, the approach is to choose the
method that will favour the poor and the
needy
 For instance, when there is taraddud which
means argument due to similarity or
ambiguity between two wealth such as
should the rate of zakat for money be
based on qiyas on gold or qiyas on silver?
Cont… - Favour to the Poor and Needy
 The jurists conclude that it is better to base
on silver since the value is higher and there is
no disagreement on the nisab of silver that
subject to zakat
 Reared animals for instance could fall
under either zakat on reared animals (alsa’imah) or zakat on business income (altijarah).
 In this case, normally the jurists will
choose zakat on business income rather
than zakat on reared animals because it
favours more the poor and the needy.