General Terms of Zakah
A definite proportion of certain property to be paid for determined channels. Zakah is a financial ordinance upon every Muslim if his wealth reaches a certain amount. Taking into account its very nature, it is no wonder that Zakah constitutes one of the five pillars of Islam. Allah, the Exalted , prescribed it in the Qur'an, His Messenger corroborated it by his Sunnah, and the Muslim community by consensus upheld it..
Properties Subject to Zakah
These are the properties that meet the legal conditions in order to be subject to Zakah. In order for these properties to bear Zakah, they should be in one's possession, augment, reach Nisab and be in excess of one's basic needs. In addition, a full year should pass in case of properties other than plants, fruits, minerals and jewelry.
The minimal amount of property liable to the payment of Zakah.
The Lapse of a Full Year
A property is not counted for Zakah unless after the lapse of a full Gregorian or lunar year right from the day it reaches the Nisab, taking into account the differences in days when calculating the amount of Zakah.
Amount of Zakah
The proportion paid as Zakah out of one's wealth when it reaches Nisab after the lapse of a full year.
One-tenth (10 %) of property to be paid annually for Zakah.
One of the twenty units constituting the property liable to Zakah. It is estimated as 1/20 or 5 % of the total property.
One of the forty units constituting the property subject to Zakah. It is estimated as 1/40 or 2.5 % of the total property.
Zakah giver is a person those property is subject to Zakah. It is provided that he is a Muslim. The majority of scholars held that it is not necessary that he should be of legal age and mentally competent.
The Recipients of Zakah
These are the channels receiving the property collected from Zakah. These categories are defined in the Qur'anic verse,
"The alms are only for the poor and the needy, for those who collect them, for those whose hearts are to be reconciled, for the freedom of those who are captives and in debt, for the cause of Allah, and for the wayfarers; [it is] a duty imposed by Allah. Allah is the Knower, the Wise" [At-Taubah 60].
Double payment of Zakah
In the field of Zakah, it means paying Zakah twice a year, which is not ordained. This is based on the hadith, "Charity is not to be paid twice."
A tax levied on the People of the Book who live in Muslim states. It is based on the Qur'anic verse, "Until they pay Jiziah with willing submission, and feel themselves subdued."
Whatever given to the poor out of seeking Allah's reward. Charity is something different from Zakah. Zakah is sometimes designated as Sadaqah prescribed by Allah.
Administrators of Zakah
These are the people who collect and manage the sums gathered as Zakah, and distribute it in its legal prescribed channels.
It is an illegal tax levied on goods imported into the Islamic territories. Al-Makis is the one who blocks the way of traders and caravans in the Islamic territories to collect these taxes from them. Few scholars held that Al-Max is a sum of dirhams collected from traders in the pre-Islamic period. The Prophet (peace be upon him) said, "No Makis is permitted into the Paradise."
Terminology of Zakah on Money
Money refers to minted gold and silver and other metal or paper currencies taken as exchange means and for determining the value of objects.
Money of absolute value
The term refers to minted gold and silver. It is sometimes called "the two currencies".
Money of restricted value
The term refers to paper currencies whose gold and silver value is restricted to what monetary authorities allocate to them. These currencies differ from one country to another.
These are small pieces of metal authorized by a government for use as money. They are considered a category of money of restricted value.
The two currencies
The term refers to gold and silver whether in the form of money, gold or silver bars or nuggets and the like.
A certain type of silver. The Prophet said, "As for minted silver, a quarter of a tithe should be paid for Zakah."
A metallic element taken as a medium of exchange. The Prophet said, "Charity is not due for silver less than five okes."
A weight (Mithqal)
A unit of weight equal to 4.25 grams for weighing gold. It is mentioned in the hadith, "You are not required to pay Zakah for your gold until it is twenty weights. Once it reaches twenty weights, an amount of half weight should be paid." Sometimes, it is referred to as "dinar" for it is assigned the same value.
Women's ornaments made of gold and silver or other metals such as pearls, corals, aquamarine, diamond and the like.
A soft, yellow, corrosion-resistant element, the most malleable and ductile metal, occurring in veins and alluvial deposits and recovered by mining or by panning or sluicing.
See "Zakah on Commercial Goods"
A minted silver currency. A legal dirham equals 7/10 of dinar and 2.975 grams.
A minted gold currency. A legal dinar equals a weight (Mithqal) of gold (4.20 grams).
Terminology of Zakah on Mineral and Marine Resources
The term refers to treasure buried in the earth. It occurs in the hadith of the Prophet that "On buried treasure, one-fifth is due."
Natural valuable substances excavated for people's use.
Valuable treasures intentionally buried in the earth. These may be gold, silver or the like.
One-fifth of buried treasure
The amount of Zakah that should be paid for one's buried treasure. It is 20 % of the total treasure. This is based on the hadith, "On buried treasure, one-fifth is due."
This includes everything that can be taken as booty. In some sense, the buried treasure is a type of booty.
These include pearls, corals, ambergris and other marine substances
Terminology of Zakah on Commercial and Industrial Commodities
The business of buying and selling commodities in pursuit of achieving profit.
One involved in trade.
The term refers to commodities of whatever type other than money.
The term refers to goods assigned for trading activities such as buying and selling and other business behaviors with the intention of achieving profit. In contemporary commercial jargon, they are designated "circulated assets".
The term refers to commodities reserved for personal use and not for trade. In contemporary commercial jargon, they are called "fixed assets"
Business on the spot
This term refers to business transaction carried out on the spot. These are based on the Qur'anic verse, "... but if it be a transaction which you carry out on the spot among yourselves."
Commodities bought or made for circulating in business and kept in one's possession until Zakah is due on them.
Goods in vogue
Commodities with much marketing and purchasing potentiality.
Commodities with no marketing and purchasing potentiality.
The process of having a commodity evaluated by specialists. In the area of Zakah, it refers to determining the value of the assets liable to Zakah.
Monetary or material worth of a commodity or service.
Evaluation of assets on the basis of the price in which they have been bought. In commercial realm, it is called "historical value", "historical cost" or "register value".
Evaluation of assets on the basis of their market value at the time of paying Zakah. In the commercial realm, it is designated "current value" or "market value".
The price of commodities when sold in small quantities directly to consumers.
The price of commodities when sold in large quantities, as for a resale by a retailer.
Rendering goods into currencies.
An obligation or liability to pay or render something to someone for a legal reason.
Debts resulting from business transactions.
Debts that can be recovered due to the debtor's confession or capability to repay. They are also called "good debts" or "sound debts".
Debts that are difficult to be paid back due to the debtor's financial inability, denial or procrastination. They are all designated "doubted debts" or "weak debts".
Debts one owes to others to fulfill his basic needs.
Debts whose fulfillment is difficult in future due to the debtor's bankruptcy or absence.
Debts that can fall only by fulfillment or discharge.
Debts whose recovery is uncertain. The Prophet, peace be upon him, said "No Zakah is due on debts of uncertain recovery."
Bills of exchange
Documents written to state one's being in debt to another. In business, they are termed "receipt sheets".
Bills of debt insurance
The term refers to bills of exchange or securities that a firm signs to guarantee its liability to others. In business, they are termed "payment sheets".
Deferred investment account
A category of investment accounts in which one is entitled to draw from his deposit and attain profit for it only after the lapse of one year.
Investment savings account
A type of saving accounts in banks in which one can save and draw and get a profit for his deposit.
It is an agreement concluded between a client and a bank to deposit an amount of money. Under this agreement, the client is entitled to draw money by check or withdrawal orders upon request.
Depositing money in banks with a permission of investment. It'd be better called "investment account"
Transferring debt from the liability of someone to another.
The commitment of money or capital in order to get a financial return.
Notes of monetary value issued for investment purposes.
A type of documents testifying a monetary right for its owner.
Any of the equal parts into which the capital stock of a corporation or company is divided.
Nominal value of shares
The basic value of shares stated at the time of corporation foundation.
Market value of shares
The value given to shares in the market at a certain time.
A part of the capital of a company or of its financial rights.
The growth in property resulting from business.
Terminology of Zakah on Crops and Fruits
The produce of plantations other than trees.
The produce of trees.
The act or process of gathering a crop. Allah the Almighty says, "But render the dues that are proper on the day that the harvest is gathered.(Al-An`am 14) "
The water taken from well.
The term refers to the use of machines to irrigate plants.
Approximate estimation of crops and fruits to determine the amount of Zakah that is due. The Prophet (peace be upon him) said, "If you estimated (the amount of Zakah on crops and fruits) by estimation, you should leave one-third. If you did not leave one-third, you should leave one-fourth."
The one carrying out the approximate estimation of crops and fruits to determine the amount of Zakah.
Costs of plants and trees
The cost of plants and trees starting from the sowing phase up to the harvest.
The amount of tax levied on lands. It is of two types: proportional land tax and percentage land tax.
A tenth part of crops and fruits paid annually in Zakah for plants and trees irrigated at no cost.
Half a tithe
Half a tenth of crops and fruits paid annually as Zakah on plants and trees irrigated at some cost.
Sa`, the measurement of the people of Medina, consists of four Mudds. It equals 5.33 pounds or 2.176 kg.
A standard measure that equals Prophetic 60 Sa` or 132,6 kg of wheat approximately. It is reported in an agree-upon hadith that the Prophet said, "No charity is due on dates less than five Wasqs.
Plant watering and service contract
A contract in which an owner of a land pays a certain part of the crops or fruits in return for watering, serving and caring for land.
Giving over land to the charge of another party on condition of receiving a fixed part of its produce.
Lands one-tithe or half tithe of whose produce should be paid as Zakah.
The lands surveyed for land tax.
Tribute imposed on agricultural lands. Sometimes the term refers to the tax paid by the non-Muslim owners of lands.
The term refers to granting the produce of one or more fruits as gift for the poor for a full year.
Those treading lands
Those are the people who tread trees bearing fruits.
The term refers to those allowed to eat from the fruits on which Zakah is due. They include the orchard owners, their relatives, guests and the group accompanying them before harvest.
Terminology of Zakah on Cattle
Cattle let loose for free pasture
These are the cattle bred up on free pasture such as grass and trees for nearly a full year.
Cattle fattened at the account of their owners.
Cattle raised domestically to satisfy one's basic needs.
These include animals used to carry out certain jobs such as bringing water on camels or plowing lands by cows.
Animals bred to yield milk, meat or reproduction.
Cattle owned for trade and profit purposes.
Gathering the dispersed and dispersing what is gathered
The act of gathering dispersed cattle or dispersing gathered cattle so that one may evade or reduce the payment of Zakah. The Prophet forbade this act in hadith, "We neither take the milk of infants nor disperse what is gathered (of animals) nor gather what is dispersed (of animals)." (Reported by Ahmad)
The act of mingling one's cattle with those of another in pasture, watering and shelter to reduce costs. These are treated as one property in nisab and the due amount of Zakah.
Sheep sufficient for Zakah
It is the one-year old sheep.
Over one-year old cow
The term designates the cows of one year or a little above, male or female.
The term refers to female cows over two years of age.
It is a she-camel of one-year of age.
It is a she-camel of two years of age.
Three-year old she-camel
It is a she-camel of three years of age.
It is a she-camel of four years of age.
Terminology of Zakah on Capital Goods
Goods taken as capital for yielding profit not for re-sale purposes.
What is gained from the capital goods. It includes the rent of real estates and hiring machines and the like.
The term refers to the increase in one's property. It includes business gains (resulting from transactions), yields (the increase in trade commodities before selling them) and profits (acquired from durable goods).
The term denotes the property acquired periodically such as those one can gain from gifts, inheritance and presents.
Costs of basic needs
These are the costs of living such as eating, drinking, accommodation, education and medication and others that are necessary to preserve the objectives of Shari`ah (guarding one's religion, soul, mind, offspring and property).
Terminology of the Channels of Distributing Zakah
Channels of Zakah
These are the eight categories who receive the money gathered as Zakah. They are ordained by Allah in the Qur'anic verse, "Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to the truth); for those in bondage and in debt; in the cause of Allah; and for the wayfarer: (thus is it) ordained by Allah, and Allah is full of knowledge and wisdom."
Those who can not fulfill their basic needs. It is said that they include those who do not have the nisab of Zakah.
Those who can not provide for themselves, their families and those under their responsibility. It is said that the term refers to those who have nothing.
Administrators of Zakah
This term stands for all those serving in the field of collecting, storing, guarding, registering and distributing Zakah.
Those whose hearts are made to embrace Islam
This is one of the eight channels of distributing Zakah, which finds a solid proof to support it in Islamic legislation.
Since there are no slaves any more, the portion of Zakah dedicated to setting slaves free is to be shifted to the other channels of distribution.
Those in Debt
They are debtors incapable of paying back their debts, those paying indemnities for conciliating other disputing parties, and guaranteeing debts owed by others.
In the cause of Allah
Jihad in the cause of Allah and for propagating Islam.
A wayfarer is a traveler who has not enough money to return home.
One strong enough to gain living
That who has strength enough to fulfill his basic needs. The Prophet (peace be upon him) said, "Charity is not allowed for a rich man or who is capable of gaining his living."
What one may bear as a consequence of his conciliatory efforts.
The ruin of property
Poverty and need
Transferring Zakah to a country other than that from which it has been gathered.
Insufficiency of Zakah
This occurs when the amount of Zakah is not sufficient for its eight channels of distribution.
In the realm of Zakah, the term refers to the act of levying tax on the rich under legal conditions if the outcome collected from Zakah is too little to satisfy the eight channels of Zakah.
Zakah fund budget
An itemized summery of Zakah resources and expenditures within a year.
Deficit in Zakah fund budget
This case occurs when Zakah expenditure is more than the resources within a specific period.
Zakah fund budget surplus
This case occurs when Zakah resources are more than its expenditure within a certain period.