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Zakah Overview

Zakah Overview. In the name of Allah, the most merciful. What is  zakah ?. In Arabic,  zakah  means purification, growth and blessing

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Zakah Overview

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  1. Zakah Overview In the name of Allah, the most merciful

  2. What is zakah? • In Arabic, zakah means purification, growth and blessing • It is a charitable practice that requires all able adult Muslims (those who meet the requirement of nisab) to contribute a fixed portion of their wealth to help the needy

  3. What is nisab? • Nisab is the minimum amount of wealth a Muslim must have to be eligible to contribute zakah. Nisab is equivalent to the value of three ounces of gold • ~ $4,800

  4. Who can my zakah be given to? • According to the Holy Qur’an (9:60), there are eight categories of people who qualify to be beneficiaries of zakah: • The poor • The needy • The collectors of zakah • Those who hearts are to be won over • Captives • Debtors • In the cause of Allah (swt) • Travelers

  5. When to pay? • Once a year, typically in Ramadan to maximize rewards • Year end • After filing taxes and knowing return value

  6. What should I pay Zakah on? • Cash • Investments (stocks, mutual funds, bonds, property, 401k, etc) • 401k Zakah is mandatory yearly on amount left after penalty and Tax (assuming you were to take it out) • Jewelry (which you do not regularly wear) • Inventory

  7. What’s the difference between zakah and sadaqah? • In the language of the Holy Qur’an, zakah and sadaqah are the same • In practice, however, sadaqah is the term used to indicate voluntary charitable giving while zakah is obligatory

  8. Calculation • Zakah = ((cash + inventory + money owed to you from capable people) - money you owe “not including mortgage”)) • It is very important to make a good effort in doing a correct calculation and you might want to add some on top just in case (5-10%) • There are a few calculators on the Internet which you can use: • http://zakat.110mb.com/index.php?p=1_4_Download-Now • http://www.islamic-relief.com/zakat/calculator.aspx • http://www.islamic-relief.com/seasonal/ramadhan/zakat-calculator.aspx • http://www.hidaya.org/zakat-calculator • http://welcome-back.org/zakat/calc_comp.shtml

  9. Resources • Calculating Zakah on Long Term Investments: http://www.zakatguide.org/english/Cal_Zakah_%20Long-Term_Investments.html • The Calculation of Zakah for Muslims in North America: http://www.kantakji.com/fiqh/Files/Zakat/The%20%20Calculation%20%20of%20%20Zakah.htm

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