ZAKAT IN ISLAM
THE DEFINITION AND
IMPORTANCE OF
ZAKAT
1
Presentation outline
Definition
The
of zakat
importance of zakat
Conditions
People
for zakat
entitle to receive zakat
Methods
to determine the
sources of zakat
2
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 2 nd 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
Avoid
1.
Syahadah - is a statement professing monotheism and
Muhammad as God's messenger.
2.
Solat - Pray 5 times a day
3.
ZAKAT- giving is the practice of charitable giving by
accumulated wealth
4.
Sawm / Siyam – Fasting in the month of Ramadhan
5.
Hajj - is a pilgrimage that occurs during the Islamic month of Dhu al-Hijjah to
the holy city of Mecca,
Muslims based on
stinginess
Encourage
As
accepting
donations
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
the Prophet SAW said:
that
"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.
People Entitle to Receive
Zakat / Benefeciaries of
Zakat
The Needy/ Poor/Fakir / Fuqara’
- Income is
less than 50 percent of daily needs.
2.
Miskin (Masakin) - Just sufficient to finance
basic needs.
3.
Amil - The one with authority / responsible
to collect zakat.
4.
Muallaf - Individual who convert to become
Islam.
5.
Fisabilillah - Individual involve with activities
to defend and strengthen Islam.
6.
Ibnu Sabil - Refugees, homeless, Orphanage
Muslim.
7.
Gharmin - Suffered many debt and unable to
settle them.
8.
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 (al-sa’imah) or zakat on business income (al-tijarah).
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.