Ruling on taking possession of haraam wealth by means of inheritance

Islamic laws of inheritance

While modern reforms and changes have influenced several fields of Islamic law, the detailed classical inheritance structure has been one of the enduring legacies of classical Islamic law or the Shari’a.

The formal inheritance rules have several distinctive features. First, there are predetermined percentage shares for pre-selected beneficiaries while at the same time allowing some flexibility through bequests and legitimate estate planning. Second, a Muslim’s ability to bequeath is restricted to only one-third of an individual's estate under certain rules with the remaining two-thirds devolving according to the compulsory inheritance rules. Third, the scheme of mandatory fixed shares is remarkably inclusive and provides access to property to a range of family members. Finally, the inheritance rights cannot be generally taken away. Rather than a set of abstract rules, Islamic inheritance rules are intended to facilitate distinctive Islamic conceptions of property, family, community, empowerment and justice.

What property may be inherited?

The Islamic law of succession makes no distinction between different kinds of property. It is immaterial whether property is real (land) or personal, movable or immovable - it covers all assets.

Who may inherit property?

Given the wide range of beneficiaries that the Islamic inheritance system seeks to cater to through a sophisticated balancing process, the results can turn out to be hairsplitting permutations and combinations varying according to a given scenario. There are some differences in Sunni and Shi’a positions.

Benefits of the rules for fixed shares

There exist some easily perceived potential benefits to a scheme of specified shares, as compared with systems of inheritance which provide greater apparent legal freedom to the individual seeking to control devolution of his/her property upon death.

Fragmentation of property vs. cohesiveness of the extended family

The fixed inheritance share rules – which apply to big or small estates, residential or commercial property, liquid assets or investments – can lead to minute divisions, making fragmentation of property a problem, particularly, although not exclusively, in relation to agricultural land.

INHERITANCE RULES AS PART OF ISLAMIC INHERITANCE SYSTEMS

A variety of legal tools have developed in different contexts to permit individuals to make arrangements for the transmission of property, according to their own determination.

Islamic wills (wasaya)

Gifts can be made to take effect upon death, by means of a will, but only up to one-third of an individual's estate can be bequeathed in this manner with the remaining two-thirds devolving according to the compulsory rules.

Women's inheritance shares as part of a wider property system

Female relatives and spouses are accorded shares, but half that of a male in a similar position and male relatives are more likely to inherit and to enjoy a greater share of the estate. This difference in treatment between men and women is usually explained by reference to the fact that it is also a feature of Islamic law that a wife is entitled to maintenance from her husband, in terms of shelter, clothing, food and medical care. Despite the argument that women are compensated for their unequal inheritance shares through such material obligations on the part of husbands to their wives (and other tools such as dower and gift), the apparent formal paper inequality remains a matter of vigorous debate and gives rise to calls for legal reform.

Unborn, illegitimate and adopted children and orphaned grandchildren

Since a child is deemed to be in existence from the point of conception, a child in the womb is competent to inherit within Islamic law. However, an illegitimate child whose paternity was contested may not inherit from the wife's husband, although that child may inherit from its mother and its mother's family.

Adoption is not recognised under Islamic law (Shari'a), so inheritance through legal adoption into a family is not feasible. A bequest in favour of an adopted child may not exceed one-third of an estate, under the rules. An orphaned grandchild is unlikely to inherit from a grandparent under Islamic inheritance principles.

'Estate planning' and lifetime transfers

There are a variety of legal techniques that a person contemplating death may deploy as a form of 'estate planning', in order to avoid the strictures of the compulsory inheritance rules. These include the lifetime transfer or gift (hiba) and the establishment of a family endowment (waqf ahli). The tools deployed for estate planning are subject to debate but the modernisation of Islamic societies has resulted in a propensity towards several kinds of estate planning.

Family endowments

Another legal strategy for an individual seeking to control the devolution of his or her property is to establish a family endowment (waqf ahli). A major source of women's historic wealth appears to have arisen from beneficial interests in endowment (waqf) properties, but these endowments have now either been abolished or subjected to severe limitations in most countries.

Non-registration of land to avoid inheritance rules

There is evidence in some Muslim communities that individuals keep their property outside the formal land registration system, because of the costs involved and to avoid giving women their allotted shares under the Islamic inheritance rules.

POST-INHERITANCE ADJUSTMENTS

Women, law and custom

Inheritance law often lies at the heart of discussions about gender equality and women's property rights.

Consolidation of property

In a process known as consolidation, the division of an estate into fractional shares may be followed by a series of sales and exchanges designed to reduce the number of co-owners. It is women who usually exchange their rights in land for movable property, cash or gold and it is women in the main who decide to give up their fractional shares, particularly in land.

Renunciation of inheritance rights

There is a widespread practice after the inheritance shares are distributed whereby a person, typically a woman, may renounce her inheritance rights (tanazul). While gender rights’ advocates are justifiably concerned over women being forced to renounce their limited property rights, the reality may be far more complex. It may be a choice over empowerment through property or enhanced family support.

LEGAL REFORMS TO INHERITANCE SYSTEMS

Codification and secularisation

There has been little legislative interference with the compulsory inheritance rules and daughters continue to enjoy only half as much as their brothers from the estate of a parent, which is a cause of concern for some women's organisations.

Changes regarding adopted children, grandchildren and others

One example of a change in inheritance law in several countries, though subject to juristic debate, which has been widely justified on the basis of the Qu'ranic "verse of bequest" and social practice is the obligatory bequest for orphaned grandchildren.

Islamic inheritance systems and the equality debate

The differential treatment on the basis of gender regarding inheritance shares, on the face of it, violates international human rights. A number of NGOs and liberal personalities in Muslim countries have called for equal inheritance rights. However, a more dominant position is the general position, even from Muslim women, that what God has ordained for shares cannot be changed.

Opportunities for empowering women

The Islamic inheritance rules despite their apparent discriminatory nature, where implemented in letter and spirit and construed holistically, provide a solid starting point for women – and other members of the family - in asserting the full range of their property rights.

STRATEGIES FOR EMPOWERMENT THROUGH INHERITANCE RIGHTS

Demystify Islamic inheritance

General knowledge of the basic legal system pertaining to inheritance appears to be embedded within Islamic communities, but the specific rights are generally not publicised, and certainly not widely articulated or agitated. This is due to several factors, the widespread illiteracy of particularly Muslim women in some societies, a perception that the rules are complex, which is deliberately reinforced by authority figures and the marginality of certain categories within families and communities. Though inheritance is only a part of the wider Islamic property regime, inheritance rules are presented as a complete divinely ordained code without room for compensation through other tools. With regard to entitlement of shares and the impact of estate planning, consolidation of property and renunciation of shares, those involved and affected must have the fora and opportunities to discuss and deal with the impact of their decisions.

Promote Islamic reasoning (ijtihad)

Islamic inheritance is closely associated with Islamic identities and social structures and a general concern about secularisation as a threat to Islam. As such, there is widespread resistance against anything other than very limited state intervention into this area, even amongst women. The reforms – towards materialising the egalitarian and distributive aspects of Islamic law- have to come primarily from within the community and be compatible with the Islamic frameworks. The main features of the inheritance rules appear to be clear-cut, particularly when they are deemed to be clear, and unambiguous (qat’i) and not readily open to any modification. However, any set of Islamic principles are to be re-interpreted and applied in the backdrop of the objectives of Islamic law (maqasid e sharia). Despite the limited forays into the realm of Islamic inheritance rules, the return to first principles and continuing development of these principles suggest that several inheritance practices may in the near future be subjected to ijtihad (interpretation as an Islamic jurisprudential tool) leading to newer forms of interpretation.

Facilitate social legitimacy

Inheritance rules have to be understood within the myriad systems of property relations, including such matters as dower and maintenance, and within inheritance systems, of legitimate methods of estate planning. Legal techniques, notably lifetime transfers and the establishment of family endowments, have developed to enable individuals to determine the devolution of their property to meet perceived social needs, to avoid fragmentation of agricultural land and family businesses. In some communities the lifetime transfer is seen as a means of adjusting for discrimination against women under the inheritance rules, but in other contexts to prevent family property moving out of male control or into the hands of 'outsiders'. Where these ‘legal’ techniques serve to achieve progressive and inclusive results, efforts to enhance their social legitimacy must be facilitated.

Resist abuse of consolidation and renunciation

The transfer of property through inheritance is only one point in the cycle. The subsequent processes of consolidation and renunciation of the inherited property must also be queried. Given the propensity towards consolidation of family property and its smooth intergenerational transfer, property- particularly farmland or a family business- is likely to be transmitted and retained in the hands of men. The social convention being to the effect that, men as the producers should manage and control both the business and the land it sits upon. Moreover there are compelling pressures on women, of affection, notions of honour and shame, and economic necessity, which have a bearing on whether they will assert a claim upon a share in an inheritance, agree to sell a share, whether for cash or symbolically, or whether to renounce a share. These are not Islamic principles but socio-economic and cultural practices which have to be tested for their utility and legitimacy, in view of the evolving family and community structures.

Promote Security of land tenure

Strategies designed to enhance security of tenure and to relieve poverty within Islamic societies, inheritance law and inheritance systems, particularly as they pertain to women, should not be regarded as a peripheral matter. Inheritance is an essential component in access to land. The inheritance process is not dependent on formal legal decrees on inheritance which are only one element of the picture. The specifics of the inheritance system in any context must be demystified, including the dominant legal techniques of estate planning in that context, the motivation for using those legal techniques and the social meanings attributed to the use of estate planning methods. However, in many political and social contexts the full implementation of the inheritance rules under Islamic law could be a realisable goal and a good starting point to extend rights in land to less powerful members of society.

Author: UN-HABITAT

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Charity to whom

Zakat or giving 2.5 percent of one's earnings as charity is an important religious tenet laid down by the Koran. It is customary for Muslims who live away from home to come back during Ramadan to perform Zakat during the Ramadan celebrations after feeding the poor and needy or send their Zakat contributions back to their home land to disburse to the poor.

Mercy Mission UK has brought a new perspective to this age old practise by asking British Muslims to make their Zakat offerings in the UK itself. The mission was set up 3 years ago to encourage Muslims to play an active role in the local community instead of remaining insulated. It launched the National Zakat Foundation this week to encourage British Muslims to contribute to local causes rather than overseas to endorse their affinity with the local community.

Azim Kidwai GM of Mercy Mission backs his request to do local charity with a religious sanction which says that Zakat should be given locally. Opinion however seems to be divided among Muslim Charities in the UK, while British Charities such as Muslim Aid and Islamic Relief UK are encouraging Muslims to pay Zakat to help fund their overseas relief operations including Pakistan in the grip catastrophic floods. The National Zakat Foundation started by the Mercy Foundation however points out to the high number of Muslims living below the poverty line in Britain and is more inclined to spend Zakat funds received from British Muslims on their welfare. Kidwai of Mercy Foundation expressed that while there is naturally a stronger urge to donate to Pakistan especially by Pakistani immigrants settled here in view of the terrible floods there, Zakat as laid by the scriptures should be given locally. He expressed that Muslims should also donate to the Pakistan flood relief as extra measure of charity after meeting the Zakat obligation of 2.5 percent in the UK. Haroun Atallah, Finance Director of Islamic Relief while agreeing that there is a religious ground to do Zakat in the land it is collected said that there is a strong Islamic belief that if Muslims were settled in a land of plenty Zakat can be moved to another land. He explained that while they do spend some charity in the UK, when disasters occur elsewhere as in Pakistan and when there is an overwhelming sentiment among donors for that cause they as a charity facilitate the transfer of Zakat funds to the said regions.

The spokeswoman for Muslim Aid spoke in almost similar lines, she explained that while her organisation spends a lot of Zakat funds on education and social ills in the UK they need to address a grater responsibility in the developing countries where 1.02 billion or one sixth of humanity go hungry. She explained that Zakat has to be channelised into more deserving areas of the world taking into consideration elements of proportionality and maximising beneficiaries.

Author: Cheers

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Presentation of Financial Statements

Since accounting is very much to do with providing information to assist users of financial information to make sound decisions, financial reporting needs to be different in order to serve the different users.

Major groups of financial report users for a financial institution are:-

1. Shareholders
2. Account holders and depositors (Clients of the bank)
3. Borrowers and others who transact with the bank
4. Regulatory bodies.

Now that Islamic banking uses a different set of accounting principles, mainly due to their different product characteristics and participation levels, it is just natural to expect different disclosure requirements within the financial statements for Islamic banks. This does not mean a reject of conventional accounting and reporting standards but rather requiring disclosure of additional information for the different sets of users.

In addition to the many user groups mentioned above, there are 2 additional distinct groups of users who are specific to Islamic banking, namely (i) Holders of investment accounts and (ii) Zakat agencies.

Given the many user groups, reports within the financial statement of an Islamic bank need to be broad enough to address the different requirements of these groups. They can be summarized to 7 sets of reports:-

1. Income Statement
2. Statement of Financial Position (Balance Sheet)
3. Statement of Changes in Shareholders' Equity
4. Cash Flow Statement
5. Statement in Changes in Restricted Investments and their Equivalent
6. Statement of Sources and Uses of Zakat and Charity Fund
7. Statement of Sources and Uses of Qard Fund

While the first 4 reports seemed the same as conventional banking, presentations are rather different mainly because of certain distinct definitions of items within Islamic banking environment. The last 3 reports are unique to Islamic banking.

Author: KL. Management

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Riba And Mortgages

We speak to bankers, both Islamic and conventional, and laymen, both sincere and cynical, and compile twenty-one of the most commonly asked questions about riba and mortgages:

He's a good Muslim. He prays, he fasts, he pays zakat. He regularly performs voluntary acts of obedience. He's a caring family man and a respected member of the community. By every outward measure, he appears to be leading the life of an exemplary Muslim.

But, somewhere along the line, he reconciled his views on interest-based finance, particularly in relation to conventional mortgages, with his religious beliefs. He became convinced, like countless other Muslims, that Islam permits one to take a conventional mortgage to finance the purchase of a home.

The question is not whether riba is impermissible; the verses in the Quran are clear enough. The question for many is: "Is the riba in the Quran the same as the interest on my home loan?"

We spoke to bankers, both Islamic and conventional, and laymen, both sincere and skeptical, and compiled twenty-one of the most commonly asked questions related to conventional mortgages. We confirmed the answers with qualified scholars who referred back to the Quran; sunna of the Prophet (Allah bless him and give him peace); the scholarly consensus of the traditional schools of jurisprudence; and the Shariah standards of the world's largest regulatory body governing Islamic banks, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

The following are actual questions posed by genuine Muslim homebuyers and industry practitioners:


1. How is the riba Allah has forbidden the same as ordinary interest? I thought riba refers only to usury.

The Quranic verses and hadith are clear on the prohibition of riba. What is not clear to some is the meaning of the word "riba."

Understanding this is particularly relevant to understanding the permissibility of conventional mortgages.

The present answer seeks to show that differences in interpretation do not originate from a substantive change in the nature of the circumstances since the time of the Prophet (Allah bless him and give him peace), as some claim, but rather from a change in the common usages of the words "usury" and "interest." So while the original meaning of the word "usury" referred to any charge over the principal according to Old English Law1, the modern meaning of the word underwent a process of evolution.

Essentially, a change in language, not a change in commerce.

Allah deems only two sins worthy of a war from Him: enmity with His friends and dealing in riba. Few Muslims doubt the enormity of dealing in riba, clear in Allah's words in the following verse:

"Those who eat of riba shall not rise (on Judgment Day) except as those arise who are smitten by the Devil with madness—which is because they say that trade is but like riba, though Allah has made trade lawful and has forbidden riba. So whoever is reached by a warning from his Lord and desists may keep what was before (Allah forbade it), and his affair is with his Lord. But whosoever returns, those are the denizens of hell, abiding therein forever.

"Allah extirpates (all benefit from) riba, but makes charity bounteous, and Allah loves no sinful ingrate.

"Verily, those who believe and do righteous works, who perform the prayer and give zakat, they possess their wage with their Lord: no fear shall be upon them, nor shall they grieve.

"O you who believe, fear Allah, and give up whatever remains of riba, if you be believers.

"But if they do not, then be apprised of war from Allah and His messenger, though if you repent, you may keep your principal, neither wronging nor being wronged" (Quran 2:275-79)

And the words of the Prophet (Allah bless him and give him peace) found in this and other rigorously authenticated (sahih) hadith:

"The Messenger of Allah (Allah bless him and give him peace) cursed whoever eats of riba, feeds another with it, writes an agreement involving it, or acts as a witness to it." (Muslim)

And the expert legal opinion (fatwa) of one of the world's leading Islamic finance scholars, Justice Mufti Muhammad Taqi Usmani, defining riba:

"The concept of riba was widely recognized among the addressees of the Holy Quran, and it is that concept which is reflected in the legal definition provided for riba either in the hadith or in the later literature of Islamic jurisprudence. According to this definition, any transaction of loan where the payment of an additional amount on the principal is made conditional to the advance of such a loan is called riba."2

Confusion, spread primarily by the more modernist readings of the Islamic Sacred Law in the first half of the 20th century, arose on whether riba refers to usurious levels of interest alone, or refers to commercial interest as well, the kind found in conventional mortgages.

Two issues are involved here: 1) the incorrect and widely-held belief that interest was, in previous times, only usuriously excessive by nature; and, 2) the popular notion that pre-modern forms of finance served primarily consumptive, not commercial, needs.

A brief look at history is instructive.

Commercial interest, as practiced today even at single digit rates, was well-known and widely-practiced among Abrahamic societies, even over four thousand years ago, mostly as a form of institutionalized agricultural finance, not just as a form of usurious consumption finance, borne out by substantial historical proof.3 Later, even the concept of credit risk became well understood, with Byzantine traders contemporary to the Prophet (Allah bless him and give him peace) borrowing on standardized rates of interest, rates that varied by profession.4

The Prophet (Allah bless him and give him peace), his Companions, among whom many were previously moneylenders, and all those trading in the Arabian peninsula during the 7th century were thoroughly familiar with the widespread practice of commercial interest-based lending: charging for the use of money with an additional sum over the principal amount.

Modernist Islamic discourse on the inadequacies of an interest-free economy is highly reminiscent of the arguments favoring interest given by medieval Christian theologians. Three centuries before pro-interest Calvinism reached its full stride, the slippery-slope justifications that marked the beginning of the end of the Church's interest prohibitions began, most openly, in the 13th century with the introduction of a time-based penalty charge on an interest-free loan.

The charge was called "interesse."

About a hundred years later, this charge evolved into one that could be incorporated into the contract itself as part of the loan, not just as a penalty for late payment, but as a charge just for the use of the funds.5

The last stage of this recidivism came in 1920 when the Church itself issued the following statement: "…in lending a fungible thing, it is not itself illicit to contract for the payment of the profit allocated by law, unless it is clear that this is excessive, or even for a higher profit, if a just and adequate title be present…"6

Even the modern dictionary attests to the true origins of the word "usury": "1. the practice of lending `money at an exorbitant interest rate. 2. an exorbitant amount or rate of interest. 3. Obs. Interest paid for the use of money…"7 The first two definitions are the norm, the third, the point. That it became obsolete ("Obs.") is testament to the fact that usury was once regarded as none other than non-exorbitant interest.

From the beginning of Islam to the present day, the overwhelming majority of Muslims, both scholars and laymen, have regarded riba, usury, and interest as but one in meaning. To follow this is to follow the words of the Prophet (Allah bless him and give him peace) to "adhere to the jama'a (overwhelming majority of Muslims)." (Ahmad)


2. How does interest harm society? Isn't it a necessary part of every economy.

Muslim societies are a living example of the debilitating effects of interest-based finance. Most sadly reflected in just about every Muslim country in the world, with daily-ballooning interest payments to the World Bank, International Monetary Fund, and other industrialized nations' agencies; notably, at low rates of interest. Interest payments that, quite unproductively, draw valuable funds away from healthcare, education, sanitation, infrastructure, and any number of other governmental responsibilities.

Debt creates dependence, and dependence provides the opportunity for control.

The following two passages are particularly relevant for those who claim that interest-based development actually works:

"According to UNICEF, over 500,000 children under the age of five died each year in Africa and Latin America in the late 1980s as a direct result of the debt crisis and its management under the International Monetary Fund's structural adjustment programs. These programs required the abolition of price supports on essential food-stuffs, steep reductions in spending on health, education, and other social services, and increases in taxes. The debt crisis has never been resolved for much of sub-Saharan Africa. Extrapolating from the UNICEF data, as many as 5,000,000 children and vulnerable adults may have lost their lives in this blighted continent as a result of the debt crunch."8

"Debt is an efficient tool. It ensures access to other peoples' raw materials and infrastructure on the cheapest possible terms. Dozens of countries must compete for shrinking export markets and can export only a limited range of products because of Northern protectionism and their lack of cash to invest in diversification. Market saturation ensues, reducing exporters' income to a bare minimum while the North enjoys huge savings. The IMF cannot seem to understand that investing in…(a) healthy, well-fed, literate population…is the most intelligent economic choice a country can make."9

Further, price inflation and increased market volatility, the usual concomitants of a highly leveraged economy, affect poor and rich countries alike. To add to this, poorer, debtor countries typically find their currencies devaluing as they struggle to repay loans in their creditor's currency.

The realistic alternative to debt is the one already employed to good use in successful Western economies: equity, upon which most Islamic finance products are based. In comparison to debt, equity provides the most resilient and least damaging source of capital for individuals, businesses, and economies.

Besides the ravaging macroeconomic effects of debt, problems also appear at the level of the individual. A 2001 study at Bath and Exeter reveals that students who fear they may fall into debt are four times more likely to suffer from depression.10 For those students who are actually in debt, the numbers may be worse.

The correlation between indebtedness and illness is particularly alarming given the widespread use and social acceptability of interest-based consumer finance, including home financing, which also offers the all too convenient option of multiple mortgages.

Debt finance expands the range of possibilities available to us, and for some, to unsustainable levels, making it possible to own things one cannot afford with money one may never have. Allah's command, after all, is not intended for His benefit, but for our own.

Islam recognizes that the choices we make as individuals affect all society, and that to support an interest-based institution, even with a seemingly benign conventional home loan, is to support the broader framework of banking institutions largely responsible for today's widespread global poverty.

3. Does Islam permit conventional mortgages?

A conventional mortgage is a loan of money on which interest is charged. It constitutes a cash loan advanced by a bank or mortgage agency to finance the purchase of a property. The homebuyer agrees to repay the principal in addition to making an interest payment, while nonpayment of either entitles the bank to seize title. Some money today for more money tomorrow.

The lender takes no equity position in the property. The lender provides no service. There is no usufruct of the lender's assets. The lender provides only some cash today for more cash tomorrow. Riba, no less, and forbidden.

Author: Aurowlinton

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Give charity apart from Zakat

(In the Name of Allah, Most Gracious, Most Merciful, all praise and thanks are due to Allah, and peace and blessings be upon His Messenger)

Islam teaches us the lesson of helping the poor and the needy in the time of need when they are most deprived of things that are otherwise the necessities of life. In the Holy Quran, Allah Almighty has mentioned at different places the significance of Zakat, but at the same time, the word charity has also been used as an important task that we should perform every now and then.

"Amongst them are men who made a covenant with Allah, that if He bestowed on them of His bounty they would give (largely) in charity, and be truly amongst those who are righteous."(Surah At-Taubah)

So, apart from Zakat, charity is also equally important. Although Zakat is a farz worship and has to be carried out by people who are able to pay Zakat. Charity is something which is optional but if given, it is ‘ahsan' meaning it is liked by Allah Almighty.

"Allah will deprive usury of all blessing, but will give increase for deeds of charity: for He loveth not creatures ungrateful and wicked."(Surah Al- Baqarah) (Quran Online)

The purpose of mankind in this world is to carry out actions of community service and to help other creatures of GOD, apart from worshipping Him. When people are helped without an expectation of the reward, it is most liked by Allah and he has great rewards for people who shoe humility. He says in the Holy Quran:

"In most of their secret talks there is no good: but if one exhorts to a deed of charity or justice or conciliation between men, (secrecy is permissible): to him who does this, seeking the good pleasure of Allah, We shall soon give a reward of the highest (value)."(Surah An-Nisa)

This verse means that if you do some good, then you must refrain from bragging about it because the goodness in it dies and the whole act is compromised.

"That which ye lay out for increase through the property of (other) people, will have no increase with Allah: but that which ye give for charity, seeking the Countenance of Allah (will increase): it is these who will get a recompense multiplied."(Surah Ar-Room)

Through the act of charity, the property of a person is blessed, and as the verse explains, if it is done for seeking countenance, then Allah Almighty compensates the giver with multiplied returns.

At one other occasion, the Holy Quran says:

"And stay quietly in your houses, and make not a dazzling display, like that of the former Times of Ignorance; and establish regular Prayer, and give regular charity; and obey Allah and His Messenger. And Allah only wishes to remove all abomination from you, ye Members of the Family, and to make you pure and spotless."(Surah Al-Ahzab)

This verse encompasses the whole concept of a charity. May Allah help us with the understandings that He blessed us with to perform the actions that please Him. Quran Online is a place available on the internet from where one can learn how to read the Holy Quran via Internet.

Author: Asadasrar

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Zakat Pay by Muslim

Zakat is the practical recognition of this fact through the expenditure of money. Islam requires man to consider his personal wealth as belonging to Allah and, therefore, to set apart a portion for Him. No maximum limit has been prescribed, but a minimum limit has definitely been fixed. According to , each individual must abide by this and spend a fixed minimum percentage of his wealth every year in the way prescribed by Allah. In so spending his wealth, he is permitted neither to belittle the recipient nor to make him feel obliged or grateful to himself. His wealth must be given to the needy in the spirit of its being a trust from Allah which he is making over to the genuine title-holders. He should feed others so that he himself is fed in the Hereafter, and he should give to others so that he himself is not denied succor by Allah in the next world.

Zakat is a symbol of one's obligation to recognize the rights of others and to be in sympathy with them in pain or in sorrow. These sentiments should become so deep-rooted that one begins to regard one's own wealth as belonging, in part, to others. Moreover, one should render service to others without expecting either recognition or recompense. Each individual should protect the honor of others without hope of any gain in return. He should be the well-wisher of not just friends and relations, but of all members of society. Zakat, first and foremost, makes it plain to people that their entire ‘possessions' are gifts of Allah, and, secondly, dissuades the servants of Allah from living in society as unfeeling and selfish creatures. Indeed, throughout their entire lives, they must set aside some portion for others.

One very wrong way of conducting oneself in any social set-up is to live in expectation of worldly gain from the services rendered to others. An example of such behavior is to lend money in the hopes of getting it back with interest. Where this is a common practice, exploitation becomes rampant, with everyone trying to subjugate and plunder others. As a consequence, the whole of society is plagued with disorder. No one, be he rich or poor, can be happy in such a set-up. If a man is correctly motivated, he will be of service to his fellow-human beings only in the hope of receiving a reward from: he will give to others with the divine assurance that he will be repaid in full in the next world. In a society where there is no exploitation, feelings of mutual hatred and unconcern cannot flourish. A climate of mutual distrust and disorder is simply not allowed to come into being; each lives in peace with the other, and society becomes a model of harmony and prosperity.

On the legalistic plane, Zakat is an annual tax, or duty, in essence and spirit: it is recognition on the part of man of the share which Allah, and other men, have in his wealth.

Wealth or asset on which zakat is payable or on which zakat will be determined

Minimum Possession

Rate of Zakat

Gold, Silver or ornaments

85 grams of gold or 595 grams of silver

2.5% of the Value

Cash in hand,stocks, bonds, trading goods or any other liquid asset

Amount equivalent to 595 grams of silver

2.5% of the amount

Agricultural Produce

653kg per harvest

5% of the produce of irrigated land, 10% in the from non-irrigated land

Product of mines

any amount

20% of the value

Camels

5 camels

1 sheep or goat

Author: Alsmuslim

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Zakat as projected in the Holy Quran

(In the Name of Allah, Most Gracious, Most Merciful, all praise and thanks are due to Allah, and peace and blessings be upon His Messenger)

Zakaat is an obligatory payment that has to be paid by every Muslim adult who is able to pay the amount that is imposed as per the Islamic measurement of such payment. Quran mentions Zakat in the following words:

"And be steadfast in prayer; give Zakat, and bow down your heads with those who bow down (in worship)."(Surah Al-Baqara)

In the verse mentioned above, Zakat is mentioned right with another obligatory prayer that is a requirement from every Muslim. Allah Almighty is the only one worthy of worship and has control over all that He created. Zakat was imposed to help the needy and the orphans and others who are deserving of such payments. In this world, Mankind was meant to worship Allah Almighty and perform community service. To effectively perform community service, capital is required and Zakat is the main source of accumulating capital to perform activities that is spent on the well-being of the needy.

"And remember We took a covenant from the children of Israel (to this effect): worship none but Allah; treat with kindness your parents and kindred, and orphans and those in need; speak fair to the people; be steadfast in prayer; and give Zakat. Then did ye turn back except a few among you, and ye backslide (even now)."(Surah Al-Baqara)

Zakat is also a pillar of Islam, so we can imagine how this affects the belief and faith of a Muslim. It was said that Zakat helps you purify your wealth. Zakat is imposed with a percentage of 2.5% on the total wealth. The people who have a certain amount of wealth are eligible to make this payment and other believers who have less than the designated wealth are not bound to pay anything.

In the Quran, Zakat has been mentioned also as:

"And be steadfast in prayer and given Zakat: and whatever good ye send forth for your souls before you, ye shall find it with Allah; for Allah sees well all that ye do"(Surah Al-Baqara)

Zakat is a worship that is done towards Allah Almighty by the wealth one possesses. This wealth is supposed to be spent with a belief that it is being spent in order to earn the blessings and mercy from Allah Almighty so that He makes us able to prosper in this world and the next. As the Holy Quran says:

"How can ye reject the faith in Allah? Seeing that ye were without life, and He gave you life; then will He cause you to die, and will again bring you to life; and again to Him will ye return."(Surah Al-Baqara)

Author: Osman

[Read More...] - Zakat as projected in the Holy Quran

The obligatory Zakat

Zakat is one among the five pillars of Islam. It is applicable only to those who posses a considerable amount of wealth, which is called as nisaab in Islamic terminology. Zakat payment is an obligation which affirms obedience of man to His creator and eases the sufferings of poor.

The word Zakat in Arabic means both 'purification' and 'growth'. Our possessions are purified by setting aside a proportion for those in need, like the trimming of plants; the cutting of the plant balances as to encourage new growth. Same acts with Zakat.

Zakat is an amount of money that every adult, mentally stable, free, and financially able Muslim, male and female, should pay to support specific categories of people.

Zakat becomes obligatory when the wealth reaches or exceeds the nisaab. The nisaab (or minimum amount) defined as possession of 20 mithqal (measure during prophet's time) of gold or golden currency. In today's terms, 20 mithqal is approximately 85 grams of pure gold. One mithqal is approximately 4.25 grams. The nisaab of silver and silver currency is 200 dirhams, which is approximately 595 grams of pure silver. The nisaab of other type of money and currency is to be scaled to that of 85 grams of pure gold. Therefore nisaab of money is the price of 85 grams of pure gold, on the day in which Zakat is paid. (Current Gold Prices)

Zakat is due on an individual only when there is a passage of one lunar year (approximately 355 days) on the said wealth. The individual is ought to pay 2.5% or 1/40 of his wealth as Zakat. It is important to a note that an individual shall deduct all the debts that he/she has borrowed from others and then check if the remaining reaches nisaab, if yes, then pay Zakat.

Now that Zakat is being described, the question arises as to who is entitled to receive Zakat? ALLAH SWT in his book, the holy Quran says "As-Sadaqat (here it means Zakat) are only for the Fuqara and Al-Masakin and those employed to collect the (funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for ALLAH's Cause, and for the wayfarer (wanderer); a duty imposed by ALLAH. And ALLAH is All-Knower, All-Wise." [Taubah 9:60]

The holy Quran is very stern on those who take the matter of Zakat lightly. ALLAH SWT says "O you who believe! Most surely many of the doctors of law and the monks eat away the property of men falsely, and turn (them) from ALLAH's way; and (as for) those who hoard (stocked) up gold and silver and do not spend it in ALLAH's way, announce to them a painful chastisement (punishment) , On the day when it (wealth) shall be heated in the fire of hell, then their foreheads and their sides and their backs shall be branded with it; this is what you hoarded up for yourselves, therefore taste what you hoarded (Taubah 9:34-35).

When Abu Bakr RA became the caliph, a group denied paying Zakat stating that now prophet is not alive to whom shall we pay Zakat now? The caliph reprimanded saying "I swear by ALLAH, if they refuse to pay to me even a small piece of robe which they used to pay to the Messenger of ALLAH, I would fight them for it." (Bukhari)

Muslims! Please pay off your Zakat and purify your wealth. It is not necessary to pay Zakat during Ramadan. The spirit of paying Zakat in the month of Ramadan is that ALLAH SWT doubles the reward of whatever is done during this month and it also helps an individual to keep an account on a yearly basis.

Author: Shaikh Shoaib

[Read More...] - The obligatory Zakat

Sources of wealth: Fulfilling Engagements

Sources of wealth in Islam are defined in the Qur'an and Hadith. Man is totally responsible for the way he chooses to exploit his wealth.

These sources are:

A. Natural sources.

B. Exchange of commodities.

C. Work for a salary.

D. Inheritance.

E. Wealth given or shared by Muslims.

God provides

According to the Qur'an, everything is provided by God. God has created mankind and He has provided them with their means of subsistence:

‘And the earth We have spread out; set thereon mountains and produced therein all kinds of things in due balance and proportion. And We have had provided therein means of subsistence: for you and for whose sustenance you are not responsible.' 15: 19-20

‘Is it they who would portion out the Mercy of your Lord? It is We who portion out between them their livelihood in the life of this world.' 43: 32

Employment

Employment in Islam is part of the socio-economic structure:

‘And We raise some of them above others in ranks, so that some may employ others for work. But the Mercy of your Lord is better than the wealth they amass.' 43: 32

The conditions of employment are well specified in the Tradition. The Qur'an specifies conditions of employment in the following example of Moses:

‘Said one of the (girls): "O father, engage him on wages: truly the best of men for you to employ is the man who is strong and trustworthy."' 28: 26

Moses was proposed the following contract:

‘He said: "I intend to wed of these my daughters to you, on condition that you serve me for eight years; but if you complete ten years, it will be (grace) from you. But I do not intend to place you under a difficulty. And you will find me, God willing, one of the righteous."' 28: 27

Moses agreed to the conditions of his contract:

‘He (Moses) said: "Be that (agreement) between me and you: Whichever of the two terms I fulfil let there be no ill-will to me. And God is a witness to what we say."' 28: 28

Moses has fulfilled the terms before he was charged with the divine Message:

‘Then when Moses had fulfilled the term, and was travelling with his house folk, he saw in the distance a fire.' 28: 29

Muslims are commanded to fulfil their contracts:

‘And fulfil (every) engagement, for (every) engagement will be enquired into (on the Day of Judgement).' 17: 35

Any engagement, whether commercial or non-commercial, must be fulfilled by Muslims, as part of the Muslims' covenant with God, since God becomes the Witness for the engagement or contract.

Author: Mardini

[Read More...] - Sources of wealth: Fulfilling Engagements

Means of Income in Islam: Inheritance

Laws of inheritance in Islam are very strict and are precisely detailed. It in incumbent on every Muslim to abide by these laws.

Inheritance:

Inheritance in Islam is a right and an obligation for every Muslim leaving wealth. The rules of inheritance are specified in details. The following verses explain these rights:

‘To every one, We have appointed sharers and heirs to (wealth and property) left by parents and relatives.' 4: 33

‘Unto the men (of the family) belongs a share of that which parents and near kindred leave, and unto the women a share of that which parents and near kindred leave, whether it be little or much: a legal share. And when kinsfolk and orphans and the needy are present at the division (of the heritage), bestow on them there from and speak kindly unto them. And let those fear (in their behaviour toward orphans) who if they left behind them weak offspring would be afraid for them. So let them mind their duty to God, and speak justly.' 4: 7-9

‘God charges you concerning (the provision for) your children: to the male the equivalent of the portion of two females, and if there be a woman more than two, then theirs is two-thirds of the inheritance, if he have a son; and if he have no son and his parents are his heirs, then to his mother appertains the third; and if he have brethren, then to his mother appertains the sixth, (the distribution in all cases) after the payment of legacies and debts. Your parents and your children: You know not which of them is nearer unto you in usefulness. It is an injunction from God. Verily God is all-Knowing, all-Wise. An unto you belongs a half of that which your wives leave, if they have no child; but if they have a child then unto you the fourth of that which they leave, after any legacy they may have bequeathed, or debt (they may have contracted, has been paid).

And unto them belongs the fourth of that which you leave if you have no child, but if you have a child then the eighth of that which you leave, after any legacy you may have bequeathed, or debt (you may have contracted, has been paid). And if a man or a woman have a distant heir (having left neither parent nor child), and he (or she) have a brother or a sister then to each of them twain 9the brother and the sister) the sixth, and if they be more than two, then they shall be sharers in the third, after any legacy that may have been bequeathed or debt (contracted) not injuring (the heirs by willing away more than the third of the heritage) has been paid. A commandment from God. And God is all-Knowing, all-Indulgent.' 4: 11-12

These commandments ought to be implemented. The Qur'anic text informs of the consequences of whether or not Muslims conform to such commandments:

‘These are the limits (imposed by) God. Whoso obeys God and His messenger, He will make him enter gardens under which rivers flow, where such will dwell for ever. That will be the great success. And whoso disobeys God and His messenger and transgresses His limits, He will make him enter Fire, where he will dwell for ever; his will be a shameful doom.' 4: 13-14

‘They ask you (O Muhammad) for a pronouncement. Say: God has pronounced for you concerning distant kindred. If a man dies childless and he has a sister, hers is half the heritage, and he would have inherited from her had she died childless. And if there be two sisters, then theirs are two-thirds of the heritage, and if they be brethren men and women, unto the male is the equivalent of the share of two females. God expounds unto you so that you do not err. And God is Knower of all things.' 4: 176

These laws expressed by Shari'ah are succinct and detailed. Muslims must abide by these laws serving in the circulation of wealth among the Muslims and serving to satisfy the favor of God in this world and in the Hereafter.

Author: Mardini

[Read More...] - Means of Income in Islam: Inheritance

Laws of Inheritance in Islam

Inheritance:

Inheritance in Islam is a right and an obligation. The rules of inheritance are specified in details. The following verses explain these rights:

‘To every one, We have appointed sharers and heirs to (wealth and property) left by parents and relatives.' 4: 33

‘Unto the men (of the family) belongs a share of that which parents and near kindred leave, and unto the women a share of that which parents and near kindred leave, whether it be little or much: a legal share. And when kinsfolk and orphans and the needy are present at the division (of the heritage), bestow on them there from and speak kindly unto them.

And let those fear (in their behaviour toward orphans) who if they left behind them weak offspring would be afraid for them. So let them mind their duty to God, and speak justly.' 4: 7-9

‘God charges you concerning (the provision for) your children: to the male the equivalent of the portion of two females, and if there be a woman more than two, then theirs is two-thirds of the inheritance, if he have a son; and if he have no son and his parents are his heirs, then to his mother appertains the third; and if he have brethren, then to his mother appertains the sixth, (the distribution in all cases) after the payment of legacies and debts.

Your parents and your children: You know not which of them is nearer unto you in usefulness. It is an injunction from God. Verily God is all-Knowing, all-Wise. An unto you belongs a half of that which your wives leave, if they have no child; but if they have a child then unto you the fourth of that which they leave, after any legacy they may have bequeathed, or debt (they may have contracted, has been paid).

And unto them belongs the fourth of that which you leave if you have no child, but if you have a child then the eighth of that which you leave, after any legacy you may have bequeathed, or debt (you may have contracted, has been paid).

And if a man or a woman have a distant heir (having left neither parent nor child), and he (or she) have a brother or a sister then to each of them twain 9 th brother and the sister) the sixth, and if they be more than two, then they shall be sharers in the third, after any legacy that may have been bequeathed or debt (contracted) not injuring (the heirs by willing away more than the third of the heritage) has been paid. A commandment from God. And God is all-Knowing, all-Indulgent.' 4: 11-12

These commandments ought to be implemented. The Qur'anic text informs of the consequences of whether or not Muslims conform to such commandments:

‘These are the limits (imposed by) God. Whoso obeys God and His messenger, He will make him enter gardens under which rivers flow, where such will dwell for ever.

That will be the great success. And whoso disobeys God and His messenger and transgresses His limits, He will make him enter Fire, where he will dwell for ever; his will be a shameful doom.' 4: 13-14

‘They ask you (O Muhammad) for a pronouncement. Say: God has pronounced for you concerning distant kindred. If a man dies childless and he has a sister, hers is half the heritage, and he would have inherited from her had she died childless.

And if there be two sisters, then theirs are two-thirds of the heritage, and if they be brethren men and women, unto the male is the equivalent of the share of two females.

God expounds unto you so that you do not err. And God is Knower of all things.' 4: 176

Author: Mardini

[Read More...] - Laws of Inheritance in Islam

What The Concept Of Zakat In Islam

Charity towards man, in the widest sense of the word, is the cornerstone of the Islamic society and a constant theme in the Quranic teachings. There are two kinds of charities in Islam: the obligatory and the voluntary. The obligatory charity is called Zakat while the voluntary charity is called Sadaqah.

The concept of Zakat was not totally new to Islam; similar alms giving had been enjoined upon the Israelites and the Christians as well. In Islam, the Zakat takes the form of a prescribed contribution based on a person's wealth and income. The rate of contribution varies with the kind of property owned but, on an average, works out to two and one half percent of the total value. The proceeds of Zakat are supposed to be devoted towards:

- relieving poverty and distress
- helping those in debt
- providing comfort and convenience for travelers
- providing stipends for scholarships
- providing ransom for prisoners of war
- propagation of Islam
- meeting the expenses for the collection of Zakat
- other things beneficial for the society

Muslim jurists agree that zakat is obligatory on the Muslim who has reached puberty, who is sane, who is free, and who owns the minimum assigned, nisab throughout Islamic history; denying Zakat equals denying the Islamic faith. However, Muslim jurists differ on the details of zakat, which may include rate, the exemptions, the kinds of wealth that are zakatable. Zakatable refers to assets subject to zakat according to Islamic examples and directives. Some scholars consider the wealth of children and insane individals zakatable. Some scholars consider all agricultural products zakatable, others restrict zakat to specific kinds only. Some consider debts zakatable. Similar differences exist for business assets and women's jewelry. Some require certain minimum nisab for zakatability. The same kind of differences also exist about the disbursement of zakat

Zakat, therefore, is a duty enjoined by God in the interest of the society as a whole. While on one hand these charitable contributions provide for the needs of the society, on the other hand the act of giving in the name of God purifies the heart of the contributor from selfishness and greed.

Author:Islamicnet

[Read More...] - What The Concept Of Zakat In Islam

Zakat in Islam

The economics of zakat and its relevance to modern times is a hotly debated issue among both religious and liberal Muslims. This series of articles will attempt to explain the concept of zakat in the light of only the Quran and the faithful implementation of this concept by Prophet Muhammad (peace be upon him). We will see how a similarly implemented system can solve the current economic problems of not just Muslims, but of the whole world.

Contrary to the beliefs of both religious and secular Muslims, the Muhammad's achievements were based not on ephemeral but on the permanent values of the Quran. He brought about the greatest revolution – even an economic and political miracle – in human history (see Michael Hart, THE 100, pages 3-10). In a very short time after the prophet migrated to Medina and implemented the system of salaah and zakat, the economic condition of the people changed. (For a detailed discussion about the system of salaah, see a two part article in MONITOR, pages 6-10, September/October 1998, and pages 7-12, December1998/January 1999).

The Muhammad (pbuh) is reported to have said: If a single person were to sleep hungry in a town, then God's protection is lifted from such a town. [ Masnad Imam Ahmad ] This hadith emphasizes that no one (Muslim or non-Muslim) under this system should go hungry. Thus this zakatsystem created the first universal welfare system in human history. It also gradually transformed the existing slave-based economy to a universal welfare-based economy. By the end of the Muhammad's period, the entire Arabian Peninsula enjoyed economic as well as political security. This system reached its pinnacle during Khalifa ‘Umar's time (again, see Michael Hart, THE 100, pages 261-265), a time when, history tells us, hardly anyone was in need of charity.

What has occurred then in the intervening years that the Muslim masses are suffering economic deprivation even though they live in areas with plenty of natural resources? The answer is that we have changed or abandoned the system implemented by the Prophet Muhammad.

Author: Nawaz

[Read More...] - Zakat in Islam

Exchanging this Life for the Hereafter

The Islamic precept in economic action is that God bestows wealth and man must use it in the way of God while not forgetting his portion of it in the worldly life.

In a Muslim community hoarding and monopolizing of wealth are considered wrong doing and are forbidden.

Muslims ought to spend of their wealth in charity and must keep circulating wealth among the entire members of the Ummah through work. This abolishes accumulation of riches and monopoly of wealth and abolishes poverty.

This creates a platform-ceiling modus operandi over which no wealth accumulation is permitted and no poverty of Muslims is permitted.

It is a struggle between material benefit and spiritual aspiration. Natural tension between the two is admitted in the Qur'an. The idea of freedom of choice between the two is offered. Man's choice is based on the divine promise.

For those who chose not to believe in God worldly life becomes the only alternative. For those who chose the other world they must work for their choice.

It is a matter of choice by weighing odds against one other.

The Qur'an advances this free and responsible choice:

‘Some of you desire (this) world, and some of you desire the Hereafter.' Chapter 3: 152

According to one's choice the individual is given what he desires with the subsequent consequences:

‘Whoso desires the life of the world and its pomp, We shall repay them their deeds therein, and therein they will not be wronged. Those are they for whom is naught in the Hereafter save Fire.' 11: 15-16

‘Whoso desires the harvest of the Hereafter, We give him increase in its harvest. And whoso desires the harvest of (this) world, We give him thereof, and he has no portion in the Hereafter.' 42: 20

‘Whoso desires that (life) which hastens away, we hasten for him therein what We will for whom We please. And afterward We have appointed for him hell; he will endure the heat thereof, condemned, rejected. And whoso desires the Hereafter and strives for it with the effort necessary, being a believer; for such: Their effort finds favour (with their Lord).' 17: 18-19

Author: Mardini

[Read More...] - Exchanging this Life for the Hereafter