Means of Expenditure in Islam: No Poverty: No Riches

Spending in the way of God is defined in terms of the right of the poor and the needy in the wealth of other Muslims. It is prescribed in two ways:

a. Al-Zakat which means alms-giving which is incumbent on every Muslim who has wealth. It represents in al-Shari‘a a fixed 2.5 per cent yearly. The Arabic Qur'anic denotation of al-Zakat is literarily ‘purification', that is to say ‘purifying one's wealth and self from sins and dutiful obligations and responsibilities towards God by giving the needy.

‘And in whose wealth there is an acknowledged right, for the beggar and the destitute.' 70: 24-25

‘And be steadfast in prayer, practice the Zakat, and bow down with those who bow down (in worship).' 2: 43

b. Al-Sadaqa means charity. In this respect there is no limit for giving in charity.

Beneficiaries of expenditure

The following categories benefit directly from spending in terms of alms-giving and charity:

‘It is not righteousness that you turn faces toward East or West; but it is righteousness: to believe in God and the Last Day, and the Angels, and he Books, and the Messengers; to spend of your subsistence, out of love for Him, for your kin, for orphans, for the needy, for the wayfarer, for those who ask, and for the ransom of slaves; to be steadfast in prayer, and practice al-Zakat, to fulfil the contracts which you have made, and to be firm and patient, in suffering and adversity and in periods of calamity. Such are the people of truth, the pious.' 2: 177

‘Alms are for the poor, and the needy, and those employed to administer the funds, for those whose hearts have been reconciled (to Islam), for those in bondage and in debt; in the cause of God, and for the wayfarer: (it is) ordained by God. And God is all Knowledgeable, all Wise.' 9: 60

‘Eat you thereof, and feed such as beg not and live in contentment, and such as ask.' 22: 36

‘Then eat you thereof and feed the distressed ones in want.' 22: 28

‘For those in need, who, in God's cause are restricted and cannot move about in the land, seeking (for trade or work): the ignorant man thinks, because of their contentment abstaining from asking, that they are free from want, you shall know them by their faces: they beg not importunately from all and sundry. And whatever of good you give, God knows it well.' 2: 273

‘The righteous… and they feed, for the love of God, the indigent, the orphan, and the captive, (saying). We feed you for the sake of God alone: no reward do we desire from you nor thanks. We only fear a Day of distressful Wrath from Our Lord.' 76: 5, 8, 9, 10

If Muslims comprising the islamic Ummah (Islamic community) rating now at 1.4 billions of Muslims, then there shall be no poor Muslims and rich Muslims.

This ensures circulating the wealth of Muslims everywhere in the world today among all Muslims.

Adverse poverty is observed now among Muslims in Bangladish, Pakistan, India, Sudan, Nigeria, Somalia while absolute wealth and riches are concentrated in the Hands of Few money-mongers like the Saudi Family ( 12 billions of Dollars private fortune of King Saud), Kuwait, the Emirates, Sultan of Oman, Sultan of Brunei ( 25 Billions of Dollars and five hundred wives).

How far away Muslims now from having their own money distributed equally among them all?

This explains the frustration, the need, the hatred of those who have not against those who have in Islam.

Where is brotherhood, equity and justice. It all begins in the economic juctice. Then social and political justice follows as a consequence.

This explains the anger manifested in the rebellion and armed violence of those who do not have to restore their legitimate rights in sharing with other Muslims in the wealth of Muslims.

Author: Mardini

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Zakat Planning

Another important issue that can be brought about in the management of wealth in Islam is the paying of Zakat. Every Muslim who has the ability to pay the Zakat is obliged to do so. It is one of the five pillars of Islam. So now, you can see the great importance of paying the Zakat. Mostly in Islam Zakat is paid by the wealthy Muslims. Allah made the paying of Zakat compulsory for a reason. This was in order to help the poor and the needy Muslims or the Muslims who are completely unable to support themselves. I say paying the Zakat is a form of wealth management because the wealthy Muslims will be able to deliver some of there wealth to other needy Muslims. Therefore, in doing so the wealthier will not become more and more wealthy, but moderate. This is why God (Allah) made some people in this world rich and some poor. Wealth can be a very dangerous element because once a human being becomes possessed with this wealth. He will forget about his religion and God altogether. In order to get rid of this, Allah made compulsory for every Muslim to pay the Zakat.

However if you look at the conventional or the capitalist advocates, you will discover that most people have became inclined to their wealth that they do not have or follow any religion. In short they have become pagans. They also do not believe in the hereafter. This is so, because there is no form of wealth management such as paying the Zakat to the needy people around the world. This is why, the capitalist always concentrate on material satisfaction and not spiritual. They only seek material satisfaction and think of maximizing there wealth through all the means available, weather the right or wrong way. They also have this misconception of saying that their scarce resources and unlimited needs in the world. It is like saying that God did not know what he was doing. Because God created this world and made sure that people would be satisfied with whatever there is available.” The imposition of Zakat is to purify oneself as well as one’s own property.” “Islam believes if a wealthy person is accustomed to paying Zakat, his infatuation for wealth will be softened and it will be a source of advantage to him and the society in the end.”

“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 bandage and indebt; in the cause of Allah; and for the wayfarer: (thus is it) ordained by Allah and Allah in full of knowledge and wisdom”.                    (9: 60)

Prophet Muhammad (PBUH) is reported to have said, “Zakat is not permissible for someone who is not in need except in five cases; someone fighting in the way of Allah, someone who collects Zakat, someone who has suffered (financial) loss (at the hands of debtors), someone who buys it with his own money, and someone who has a poor neighbor who receives some Zakat and gives some as a present to the one who is not in need.”

Zakat is obligatory on all Muslims capable of paying it. Capability is referred to as nisab, a taxable minimum. It is used for specific purpose and paid to specific groups of people or individuals. The Quran lists eight (8) recipients as in the above verse. The role that Zakat plays in the distribution of wealth and income is, without doubt, very important. It reduces the gap between the haves and the have-nots, and induces saving and consumption behaviors in addition to the fact that it helps mobilize income for redistribution.

Islam discourages funds to remain idle, simply because there is no interest, as compared to the conventional system which makes up for earned income with no effort involved. If we look at the saving decision, we notice that idle savings in Islam are penalized because a Muslim is expected to pay Zakat. At the end of the day he remains worse off because for every RM100 that he saves, he loses RM2.50 (2.5% Zakat ratio). Hence, his rational option would be to incorporate investment expectations into his savings decisions. Assuming he sees no light in the direction of investment expectations, he might cut savings and increase consumption in the process, which does not go along with the poor investment expectations. Thus, inclusion of these expectations in the savings decision paves way for a balanced system. Zakat allows a minimum living standard for all residents in an Islamic society, unlike in the capitalist system where the savings of the haves double and multiply through interest, and the have-nots have no social insurance because there is no Zakat.

In a capitalist system an individual might give out part of his wealth if and only when he denies to do so with out clear guidelines as to what, how, and how much he should give, because there is a possession kind of ownership. In an Islamic framework, Zakat illustrates a utilization kind of ownership and not that of a possession kind. The former kind of ownership accrues when wealth is utilized for its purpose and benefits derived from that wealth, else, the right of ownership is withdrawn, more especially in the case of land ownership.

Islam on the other hand, has clear guidelines as to what should be given out as Zakat, who should give out Zakat and how much he should give out (see Zakat at a glance). Zakat is obligatory on every eligible Muslim male or female, and is given for the pleasure of god and to earn his grace. On the things liable for Zakat, the prophet (PBUH) is reported to have said,

            “There is no Zakat on less than five Awsaq of dates, there is no Zakat on less than five awsaq’ of silver and there is no Zakat on less than five camels. And in another Hadith, the prophet (PBUH) is reported to have said,  “On’ land that is watered by rain or springs or any natural means there is (Zakat to pay of) a tenth. On irrigated land, there is (Zakat of) a twentieth (to pay).”

Author: Prof. Dr. Mohd. Ma’sum Billah

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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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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

[Read More...] - Give charity apart from Zakat

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

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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

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

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