Zakat is one of the five pillars of Islam, and it is a sacred duty for Muslims. Zakat is a way to purify your wealth and help those in need. It is a way to show your thankfulness to Allah for His blessings, and it is a way to help those who are less fortunate. Zakat is an important part of our faith, and it is a way to make the world a better place. Let’s discuss how is Zakat calculated and why is Zakat important for purifying wealth and eradicating poverty?
What is Zakat?
Zakat is an Arabic word which means “that which purifies.” Zakat is the proportion of wealth that a Muslim is obliged to contribute to the community as a religious duty each year. However, the amount varies from person to person, but it is 2.5% of the wealth one possesses above the Nisab.
The Nisab depends on the minimum wealth you have in a different category. For example, the Nisab amount for gold is 3 ounces or 87.48 grams; for silver, 21 ounces or 612.36 grams. Apart from this, Zakat is also incurred on your financial assets and savings that are not sued for your living expenses.
How to Calculate Zakat?
Zakat is like taxes, and the calculation is a bit tricky as we do not pay throughout the year. To calculate, you will need to go through some steps.
Tally Up All the Income
Total up all your source of income and the assets you have owned for the last year. The sources include Gold & Silver, Cash, Investment Property*, Debts Owed to You*, Shares & Stocks*, Business Assets*, and Investment & Saving Funds*. All these sums up your total income for last year.
Items marked with an asterisk (*) have some special instructions and considerations. You should check this Zakat Guide Booklet for details.
Calculate your Living Expenses and Immediate Needs
This will include, Debts You Owe*, Personal & Living Expenses, and Business Expenses*. All these should be your expenses for last year. You will need these for the final calculation.
Find out your total Zakatable Wealth
Now, you just need to subtract the total expense from the total income.
So, the calculation will be your last year’s total income – your last year’s living expense=, Your Zakatable wealth.
Now find out if it is above the Nisab amount. However, whether you have gold or silver, you will need to find out the current cash amount of your Nisab threshold.
If your Zakatable Wealth exceeds the Nisab threshold, you need to pay Zakat. But, if your Zakatable wealth is less than the Nisab threshold, you don’t need to pay Zakat.
The Final Calculation
2.5% of your Zakatable Wealth is your actual Zakat.
Your Zakatable Wealth x 2.5%= total Zakat you need to pay for the year.
Significance of Zakat for Wealth Purification
Giving Zakat is a purification of one’s wealth. It is a way of detachment from material possessions and a way to become closer to Allah. It is also a form of charity, which is highly encouraged in Islam. Zakat is a way to help those in need and equalize the distribution of wealth in society.
Zakat is a great way to stay away from sin and prevent the negative effects of greed and wealth. It also helps take care of the poor, including widows, orphans, the disabled, and the needy.
It should be remembered that wealth is acquired by the grace of Allah. Without Allah’s will, man cannot acquire wealth by his own strength, talent, and knowledge. Therefore, we should not forget that wealth is the grace of Allah. Giving Zakat purifies our wealth by remembering Allah’s grace.
Due to the importance of prayers and Zakat, these two acts of worship have been mentioned in the Qur’an the most number of times. The Qur’an mentions prayers in about 80 places and Zakat in 32 places. The punishment for arguing these two acts is very strict.
The punishment for not paying Zakat has been mentioned in the Qur’an. Abu Huraira reported Allah’s Messenger (may peace be upon him) as saying: No owner of the treasure who does not pay Zakat (would be spared) but (his hoards) would be heated in the Fire of Hell, and these would be made into plates and with these his sides, his forehead would be cauterized till Allah would pronounce judgment among His servants during a day.
How Can Zakat Be Effective for Poverty Eradication?
Allah Almighty has given clear instructions about who receives the Zakat, that is, among whom the Zakat money should be distributed. Zakat is generally paid to the poor and needy. One of the economic and social purposes of Zakat is to eradicate poverty from Islamic society. Poverty is the number one enemy of humanity, and it may lead to Kufr.
Further, it is the most complex and acute problem in any society and country. Feelings of despair and deprivation are created in society as a result of poverty. Zakat is one of the main tools of Islam to remedy these problems. The needy and poor people can make their days happier and safer by taking Zakat. If everyone pays Zakat and if it is properly collected and used in a planned manner, it is possible to eradicate poverty even today.
So far we have discussed the basic concept of Zakat, the procedure of calculating Zakat, and the significance of Zakat. It is vital for all Muslims who can afford to give Zakat. This will help the whole muslim society to achieve purification of their wealth and souls, as well as play their part in tackling poverty and suffering in the world. Zakat is a fundamental principle of Islam that has the potential to change lives and make a real difference in society.
Source: United News of Bangladesh