Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

a)If I have the following investments & financial obligations, how much is my Zakat Payable?

1. Total Investment in Unit Trust - RM1.4 million,

2. Overdraft Facilities secured by the above Unit Trust - outstanding balance RM149,000,

3. Residential Housing Loan valued RM0.4 million - outstanding balance RM80,000 and

4. Car Loans - outstanding balance RM195,000,

b)I wish to contribute my Zakat Payable to needy people I know during the Ramadhan. What are their minimum eligibility criteria, such as economical or emplyment status, monthly income level, age, etc ? 

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

Answer:

Zakah calculations and eligible

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

If the total net worth of any believer (man, woman, or child) is more than the prescribed ‘nisaab’ of 7.5 ‘tolas’ of gold (app. 85 grams or app. Value US$2,500.00), then the person is liable to pay the obligatory annual ‘zakah’ of 2.5% on their excess wealth which has been in their possession for a full calendar year.

If the total net worth of any believer is less than the prescribed ‘nisaab’, he/she is not liable to pay any ‘zakah’ until their net worth exceeds the prescribed ‘nisaab’.

For the purpose of determining ‘zakah’, the ‘Net Excess Assets’ would be the current market value of all of one’s assets (properties, investments, jewelry, cash, etc.) except:

1. the value of the house/s one owns and actually lives in (no zakah)
2. the value of the car/vehicle one uses on a regular basis (no zakah)
3. the value of the furniture and fixtures one uses on a regular basis (no zakah)

Lets say at the end of a lunar year, your total excess net worth is valued at 1,400,000.00, and your liabilities or loans outstanding are (149,000.00+80,000.00+195,000.00) or 424,000.00.

You need to subtract your total liabilities (424,000) from your total net assets (1,400,000) ie. 976,000.00….this would be your zakatable asset and you would be liable to pay 2.50% (24,400.00) of it as your zakah for the year.

Your Question: ….I wish to contribute my Zakat Payable to needy people I know during the Ramadhan. What are their minimum eligibility criteria, such as economical or emplyment status, monthly income level, age, etc ? 

Allah Says in the Holy Quran Chapter 9 Surah Taubah verse 60:

60 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.

Allah Subhanah has prescribed that ‘zakah’ should be paid to any of the above eight listed categories:

1. To the poor
2. To the needy
3. To those who are employed to administer the zakah funds
4. To those whose hearts have recently been reconciled to the Truth of Islam (new-muslims)
5. For those in bondage
6. For those in debt
7. In the Cause of Allah
8. To the way-farer or traveler

The believers are obliged to fulfill their ‘zakah’ dues to any person who fits into any one of the above listed eight categories. The economic status, the employment status, the monthly income level, the age, etc. of the eligible believer is absolutely immaterial. As long as one finds a believer who fits into any of the above listed eight categories of eligibility, it would be permissible for the believers to spend on them from their zakah dues.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan