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Bismillahirrahmanirrahim. Alhamdulillahi Rabbil ‘Alameen. Wasalatu wassalamu ala ashrafil anbiya wal mursaleen Muhammadur Rasulullah ﷺ, wa ala alihi wa sahbihi wa sallam. Tasleeman kathiran kathira. From my body, my brothers and sisters, I want to talk about a very important subject, which is one of the pillars of Islam. It’s from the arcana of Islam. It is one of the most important acts of worship.
And it is one of the acts of worship about which Rasulullah ﷺ said, if somebody leaves it, he has left Islam.
And that is the… action of and the obligation of Zakat.
We have the famous incident of the people of Taif,
who came to Rasulullah ﷺ in Medina,
and they said, we are ready to accept Islam on condition.
And he said, what is the condition? They said, the condition is, we will accept Allah and His Rasul. We will pray, but we will not give Zakat.
Now, Taif and the Banu Saqif, who were the people of Taif, Taif was a very important place as far as the Prophet ﷺ was concerned. We know the whole story. He went there and he was repulsed and so on and so on. And the Banu Saqif were one of the two most powerful, and most honored of the tribes of Hijaz. One was Quresh, and the other one was Banu Saqif.
So, when the Banu Saqif came voluntarily to accept Islam, it was not a small thing. It was a very big thing. And this is before Fatah Makkah. So, the Muslims were weak. They needed support. And here is one of… the biggest and most powerful tribes of the Hijaz, who is coming on their own. And they are saying, we are willing to accept Islam on this one condition.
So, the Sahaba, some of the people who were there, they advised Rasulullah ﷺ, they said, Ya Rasulullah, go easy on them. Let them come into Islam. Inshallah, they will pay. They are not paying now, but they will pay later.
Rasulullah ﷺ said, the one who has separated the Salah from Zakat is not a Muslim.
He said, the one who separates Salah from meaning, he says, I will pray, but I will not pay Zakat. He said, he is not a Muslim.
And he sent them back.
They went back. They did not… He did not accept their Islam.
Many years later, when Abu Bakr Siddique Radhi Allahu anhu became the Khalifa, and they had this, what they call the Ridda, where different tribes became Murtad, or they were on the point of becoming Murtad, on the same issue. They said, we were paying Zakat to Muhammad ﷺ. Muhammad ﷺ has passed away, so we will not pay Zakat. Abu Bakr Siddique Radhi Allahu anhu said, if evil… even a rope of a camel is due in Zakat, and you do not pay, then I will go to war against you.
And people asked, Sayyidina Umar Radhi Allahu anhu asked, Sayyidina Uthman Radhi Allahu anhu, he said, how can you say this? These are Muslims. You want to go to war against a Muslim? Now he said, Sayyidina Uthman Radhi Allahu anhu quoted Rasulullah ﷺ. He said, Rasulullah ﷺ said, the one who separates the Salah from Zakat, is not a Muslim. So, fighting them is Jihad.
The reason I am saying this is because of some questions people ask me also. And also because this is taken very lightly, the issue of Zakat is taken very lightly.
And we don’t pay attention, especially younger people. You have started earning, you have your own earnings, you have your own savings, but maybe you are still living with your parents and so on. There are two things that people in this situation seem to ignore and don’t do. One is Zakat, the other one is Udhiya, Qurbani. At the time of Eid ul Adha, they will not do their own Qurbani. They are doing Baha. What is Baha doing?
Baha is doing Baha. Who is doing it for you?
The Qurbani, the Udhiya, is wajib on the individual. Your father is doing, your father is doing for himself. Your father’s Udhiya is not for you.
So similarly, your father is paying Zakat on his earnings, on his savings, not earnings.
Your Zakat is wajib on you.
Yeah? So the point is that Zakat is a very very critical matter. It’s one of the pillars of Islam and it’s a differentiator between a Muslim and a non-Muslim. So especially younger people, if you have started earning, if you have savings, then Zakat is wajib on you. Calculate it and pay. Don’t leave it.
Allah mentioned in Surah Tawbah, “Quz min amwaalihim sadaqa”, meaning “Take from their wealth, charity (Zakat), to purify them and to purify their wealth.” Wasalli, wasallu alayhim, wasalli alayhim, inna salawatika sakanu lahu. And make dua for them. And your dua is a source of sakinah, of blessing, of happiness for them. Wallahu sami’un ‘alim. And Allah is All-Hearing and All-Knowing.
The important thing to understand about Zakat is, that Zakat is so critically important and different from other ibadat. Because all the ibadat in Islam are wajib on somebody who is an adult and who is sane. Aakhil wa baliq. Right? Salah, Hajj, everything. His condition is, person should be Muslim, should be mature and sane.
In the case of Zakat, Zakat is wajib even on an infant, even on a baby. If there is money, if that baby has wealth, like for example, in wealthy families and so on, people will set up trust funds or they will buy jewellery for that child, in the name of that child. Or they will set up some money, you know, in some form or the other, for the child. Then Zakat is wajib on that money, which the guardian must pay. Obviously, you don’t hold the child responsible. The child is a baby. But the guardian must pay Zakat on that money. You can’t say, no, it’s the child’s money. The child’s money is the money. Zakat is wajib on the fund. It’s not wajib on the individual. Similarly, Zakat is wajib even on a person who is not insane, but who is not, you know, not all there. Because it might be one of your children. May Allah give us all healthy and good, sound children. Maybe one of the children is mentally off, right? So, it’s not there. Salah is not wajib on him because his mental capacity is not there.
He is mentally deficient in some form or the other. So, maybe even Salah is not, he is not liable to pray. But if that, if there is money in that child’s name, then Zakat is wajib on this. And the guardian, whoever is the guardian of this child, has to pay Zakat on this. So, Zakat is such an important and critical thing. Now, Allah said, He told us to pay Zakat. Allah did not say Zakat is specifically on what? That Rasool Allah told us and He taught us, Zakat is liable on cash. Zakat is liable on gold, on silver, and on business inventory. So, if you have a shop, in the shop, the inventory of the shop, Zakat is liable on that. If you have shares portfolio, then Zakat is liable on the value of that portfolio. The simplest
and best way of doing Zakat is to fix one day in the year when you pay and whatever you have on that day, gold, silver,
cash, and then, you know, inventory or whatever kind if you have, then you pay, you calculate Zakat on that at the rate of 2.5%. It’s a small amount, 2.5% and you pay that. So, that is the best way of doing that. Technically speaking, Zakat is liable on wealth which has been in your possession for 364 days. So, on the 365th day, Zakat is valid. But there is no need to go into a specific, for example, you might get some money today, and then next month, now you don’t complicate your life by having to calculate all of those things. The best thing is pick one day, pay Zakat. So, even if there is some money you got like one day before, you’re paying Zakat, Alhamdulillah, this is towards Allah Subhanahu Wa Ta’ala,
the so-called mistake is in your favour. So, Alhamdulillah, pay it. That’s the easiest way of doing that. Don’t need to go into the complications of the number of days and this and that. But just for you, just for us to know. Now, Zakat is payable on wealth which exceeds the Nisab. The Nisab of wealth, Nisab is the basic minimum.
And again, Zakat is not income tax. So, it doesn’t matter how much you earn.
Zakat is wealth tax. Zakat is liable on savings, not on income. If you are earning a million dollars a month, and you are spending a million dollars a month, there is no Zakat on you. Because you spent all, whatever it was. Yes?
Any kind of income. Rental income, salary income, income from shares and so on and so forth. Right? Any kind of income. Any gifts. Somebody gave you a gift, you know, a million dollars. Zakat is liable on that gift. It doesn’t matter how the money came to you. Obviously, there is no Zakat on Haram income. So, if the income is Haram, then that’s a different thing altogether. But any Halal wealth, no matter how that Halal wealth came to you, inheritance for example. Somebody died and you inherited. Right? Zakat is liable on that. So, no matter how the wealth came into your possession, as long as you have that wealth, Zakat is liable on that wealth. Right? We will come to the issue of rents. I am glad you raised that. Because there is another issue there, which is that Zakat is normally liable on the savings. So, even rents. You are receiving a rent, you spent it, there is no Zakat. But the rent you got, what is saved? Zakat is only on the savings. Am I right? So, if you are getting the rent and you are spending it, there is no Zakat on this. What is left? The savings, there is a Zakat. Also, there will be Zakat if you have,
if you are buying and selling houses. Then the houses become your inventory. So, then Zakat is liable on the value of the house, not rent. Because the house may not, you may not have given it on rent. Like I have 10 flats and I am buying and selling. So, these flats are mine. Somebody buys it. So, Zakat is liable on the value of those 10 flats. So, if those 10 flats together are worth 50 million dollars, I have to pay Zakat on that 50 million. Yes. So, you have some products. Yeah.
So, does the value of the product have to be Zakat or should I give the Zakat as the product itself? Okay. Good question. The issue is how will you pay Zakat? In what form? Right. The best way of paying Zakat is in form of currency. So, the value of the product. So, for example, Zakat is liable on gold. Now, this gold you have, you don’t have gold bricks. You have, say, jewelry. Even if you have gold bricks. Now, what do you do? Chop off a piece of the brick? No. You can. I mean, if you want to do that. But, or you can chop off the piece of your jewelry. But, you don’t do that. You value the jewelry. You say the jewelry is worth so and so. So, 2.5% of that in cash you pay whoever it is. The same thing will be with your products or whatever. So, the Nisab is 87.48 grams of gold. So, say, for example, 88 grams of gold. Just a rough figure. 88 grams of gold or 612.3. So, say, 612 or 613 grams of silver. This is the amount. Now, if you have this amount as savings, then Zakat is payable on the entire amount. For example, 87 grams of gold. The value of that will be, I don’t know what the gold price now is. Whatever. Say, for example, it is 5000 dollars. Right? 87 grams of gold is worth, say, we are here, so say, 20,000 rupees. Roughly. Right? It will be more than that. But, I am just saying. Say, 20,000. But, I have one last thing. I have 100,000 rupees of savings. So, I pay Zakat on how much? On 100,000 or 100,000 minus 20,000?
No, 100,000. Exactly. You pay on the entire amount. 20,000, which is the Nisab amount, is only for you to determine whether Zakat is liable or not. If I don’t even have this, then there is no Zakat. I have to pay nothing. But, once I am liable for Zakat, Zakat is payable on the entire amount. Whatever that amount is. Say, it is 20,001. You pay Zakat on 20,001. Right? So, that, be clear about that. Of course, the Zakat is payable on
things which are in your full ownership. For example, you might have a provident fund. Right? In companies and so on, there is a provident fund. Now, it is yours. But right now, you don’t have it. The company has it. When you retire or when you resign, this provident fund amount will come to you. So, today, even though that provident fund amount is there, maybe a big amount, there is no Zakat liable on that amount. But when you get this amount, then you will pay Zakat on this amount. So, right now, the provident fund account, you don’t need to calculate anything. Once you get it in your possession, then you pay amount on this.
Also, if you have debt,
ideally, you should not have debt, but if you have debt, then the Zakat is payable on your savings minus the debt. So, that amount should be calculated and that should be subtracted and whatever is left, you pay Zakat on that. If nothing is left, you don’t pay Zakat.
Okay. So, as I mentioned, Zakatable assets
is cash in hand or cash in bank accounts, gold and silver, stocks, bonds, either other financial investments, business inventory, which is trade goods and so on.
Then rental income, properties, all of this is liable for Zakat.
Now, question is, this Zakat is…
Let me actually go there tomorrow
before that, because that’s a longer discussion, which is Zakat is payable to whom? So, InshaAllah, we’ll talk about this tomorrow. Who is Zakat payable to? Today, we talked about what is Zakat payable on?
So, as we said, Zakat is payable on all of these things which I mentioned,
cash, gold, silver,
and financial investments and so forth. Zakat is not an income tax, it’s a wealth tax. So, it’s on savings. If you don’t have savings, you don’t pay Zakat.
And Zakat is fard. Zakat is from the Arqan of Islam. It’s a Rukn of Islam. And deliberately not paying Zakat exudes you from Islam, quite literally. So, it’s a very, very serious matter. And Zakat is payable by anyone who has that wealth, irrespective of their age. So, even if you are underage, then the guardian of that wealth is liable to pay Zakat. There was pay. And obviously, young people, Alhamdulillah, Allah has given you jobs and given you wealth and so on. Make sure that you calculate and you pay your Zakat. Just because you are living with your parents and so on, does not mean that you don’t need to pay Zakat. You must pay Zakat. Your Zakat is your Zakat. It’s valid whether you are living with your parents or not. That is immaterial. And parents also must make sure that the children who are living with you, you make sure that they are paying Zakat. Yes. So, three questions. One is, first question, what was it?
Gold price is, today gold price is high. So, why don’t I wait until the price falls then I will pay Zakat. Second one is, wives have their own wealth and, but the wife doesn’t pay her own wealth. She tells her husband, you pay for me. And the third one was, that you have investment, you are investing some amount.
Is there Zakat on the principle or is there Zakat on the earnings? See, first and foremost,
should I pay Zakat today when the gold price is high or the gold price, or wait until gold price, you know, think about this. You are trying to deceive Allah. If Allah had not given you any gold, you wouldn’t have this problem, right? If you were a, if you were on the street, if you were a beggar, or if you were somebody who was liable to receive Zakat, tomorrow we will talk about that, then you would not have this problem. So, first and foremost, I say to people who moan and groan and grumble about this, I tell them, you are making all this noise because you have the wealth, right? Why don’t we, why don’t we make dua, ya Allah, remove this problem.
Ya Allah, free him from this problem. Then you are free, right? Now you are in the position of receiving Zakat.
Then you spread your hand and stay. They will give you some money.
Is that, you want to be there? Allah can make you there. Allah can make, bring you there in one second.
When the earthquake happened in Turkey, few years back, there was a story which was going on that there was a man who, owned I think eight or, eight or nine or ten apartment buildings, not apartments, apartment buildings. So, the eight, including the apartment, maybe 30, 40 apartments or more, whatever it was.
That man was standing in the grab line, with a bowl in his hand, waiting for someone to give him some bread. Because all of those apartments, buildings, one earthquake, and they were level.
They just became a heap of dust.
Now the same man, ten minutes before that, was a very wealthy man. Somebody who owns ten buildings, is not, that’s not simple wealth, right? That’s like serious money. But this the husband is doing an ihsan on the woman and Alhamdulillah this is good if he wants to do that but she is liable for her zakat so if the husband is not paying she must pay so it’s not that she is free the husband is doing a favor to her and you know that’s good it’s good for your personal relationships also no problem with that but the liability remains with the woman and tomorrow we’ll talk about this whole liability issue it’s a long issue very important we’ll do that tomorrow same thing with regard to the investment do you pay on the principal or do you pay you pay zakat on the wealth on that day right what is your ownership on that day what is your wealth what is the savings you have so whatever you invested you got the earnings what not on it you are paying zakat on the wealth you have in your possession on the day on which you are paying zakat
so the question is do you pay zakat on the value of the property or only on the earnings the question is I mean the answer is you pay zakat on the savings on the day on which you have designated to pay zakat number one number two you pay zakat on the day on which you have you pay on the value of properties if you are in the property business if you are buying and selling properties then your property becomes your goods in trade
right I have a shop I am selling tops I am selling caps so I am I have to pay zakat on my stock because this is my business but I have a cap on my head somebody says I want this cap can you sell it I will sell it am I paying is this cap zakat then after that its not zakat its not a business I happen to sell it that’s a different issue but if I’m in the cap selling business then I have to pay zakat on my cap which is similarly if I’m in the property business if I’m buying and selling property and I’m rolling my capital then you have to pay zakat on the value of all of the properties that you own but if you are not in that business you just happen to have a property maybe you have another property and you’re getting some rental income from this and maybe somebody some Someday somebody comes and says, I want to buy this flat, I want to buy this house. Can you sell it? You sell it. There is no problem with any of that. That is not zakat. You at the end of that whole deal, how much money is there? You will pay zakat only on that money, which is your savings. Right? You are not paying zakat on the value of the property. Is that clear? JazakAllah khair. Wassalamu Alaikum Warahmatullahi Wabarakatuh.