The holy month of Ramadan is popularly known as the month of charity as people tend to donate more and more during an auspicious month. Zakat is one of the pillars of Islam, and it is due to be paid in mah-e-sawm every year. Zakat is a systematic way to do charity once a year when all privileged Muslims worldwide donate a specific amount to unprivileged people.
As per tradition, every Sahib-e-Nisab has to pay around 2.55% of their assets in the shape of Zakat to the needy and poor people of the society. The Zakat system is comprehensive yet complicated for many people. Therefore, people look for a zakat calculator online to pay the precise due amount.
Zakat helps to create and maintain balance in society, and it is an obligation on the savings for every eligible Muslim to pay a small amount. Realtorspk.com has prepared a comprehensive guide for you. Also checkout our blog business ideas in Pakistan.
The guide aims to make zakat calculation easier for everyone. Moreover, you will better understand who is eligible for Zakat. So let’s get started:
Who is Eligible for Zakat?
The one who is Sahib-e-Nisab is eligible to pay Zakat. Sahib-e-Nisab is a person who has assets valued at more than 87.48 grams/7.5 tola of gold or 612.36 grams/52.5 tola silver for the entire lunar year. Since silver and gold are no longer a currency mode in the contemporary era, it is important to convert the Nisab into local currency based on the current price of gold or silver while using the zakat calculator. Also read out our blog property tax in pakistan.
For instance, if you are living in Pakistan, you should know how to calculate zakat on cash or use a zakat calculator in cash in Pakistani Rupees. Here we will give you a few examples to discuss practical calculations to help better understand the process of Zakat amount conversions.
Please remember that we will use PKR (Pakistani Rupees) as the default currency to know the zakat percentage on cash, gold & silver and other assets. However, all the values and rates will differ based on where and when you calculate the Zakat.
Formula to Calculate Zakat:
Let’s have a look at the formula to calculate zakat;
Presume that today’s gold price is 204,300 Rs; multiply it by the amount of gold. The formula is as follows;
Gold Rate * 7.5 tolas of gold = Gold Nisab .i.e;
204,300 * 7.7 tola of gold = 1532250 Rs
Presume the silver price today is 2,625 Rs; multiply it by the Nisab amount of silver. The formula is as follows;
Silver Rate * 52.5.5 tola of gold = Silver Nisab
2,625 * 52.5 tola of silver = 137812.5 Rs
This zakat calculator will help you how to calculate zakat on gold & silver. Let’s dig into the details.
From the above calculation, you can conclude that a person whose assets are worth more than 1,532,250 Rs is a Sahib-e-Nisab person, and they will be eligible to pay zakat according to the Gold Nisab. Likewise, a person whose assets are more than 137812.5 is eligible to pay Zakat according to the Silver Nisab.
However, one should remember that Zakat is due only when the assets are worth more than the Nisab amount limit during the entire lunar year. If your assets are below the Nisab limits or kept decreasing or increasing during the year, you are not a Sahib-e-Nisab. Zakat is due in Ramadan, and the tradition of charity and donations in the form of zakat and sadaqah reaches its zenith. Read our blog Ramadan Rashan Packages and donate as much as you can to needy and poor people.
Besides, the zakat calculation date will be set as the first day once you have the amount/ assets above the limit of Nisab. Moreover, if you have been a sahib-e-Nisab person for an entire year, you can set a date accordingly to pay Zakat. Many prefer Ramadan to pay Zakat as it is the month of virtue and donation.
Which Nisab to choose – Gold or Silver?
Apart from how to calculate zakat on gold and silver, here is a million-dollar question which Nisab should choose to pay Zakat? Should it be gold or silver?
When it comes to choosing Nisab to pay Zakat, the choice can be difficult. According to many Ahadith and Sunnah of the Holy Prophet Muhammad (صلى الله عليه وآله وسلم), silver Nisab is considered better (Afzal) and rewarding for both the giver and the recipient. A lower limit of silver Nisab permits the donor to donate more Zakat and help more needy and deserving people.
However, there are no restrictions to choosing from gold or silver; if all your savings are in gold, you should go for gold Nisab. On the contrary, if you have mixed assets such as company shares, savings, real estate assets, businesses, or commodities, then choosing silver Nisab is a better option. Read our blog historical places in Pakistan.
Calculate zakat with Online Zakat Calculators:
With a better idea of Nisab, you can calculate Zakat; however, determine the fixed amount to pay, particularly when you have mixed assets, and calculation can get tricky.
Many organizations and Islamic institutes have introduced the Zakat calculator, created according to the Nisab standards for every lunar year, to resolve the issue. The calculators help in how to calculate Zakat on cash, gold, and silver, and also provide zakat percentage on cash. You can take help from these to get an accurate amount. You can also choose currency on several sites; for instance, on TCF Zakat Calculator you can use the zakat calculator in rupees.
Which Assets are Subject to Zakat?
Islamic scholars have set different traditions in the light of the Quran and Sunnah. The assets below are to be included while calculating Zakat:
- Gold & Silver
- Business assets and stocks
- Cash & liquid investments
- Debts expected to be collected by you
- Investments in assets that are zakat-able, for instance, unity trusts, shariah-compliant assets of crypto, shares, etc.
- Agriculture produce
Which Assets are Excluded in Zakat Calculation?
According to several Islamic scholars, the following items are excluded from the calculation of Zakat:
- The amount that is due to your employees as salary
- The amount that is pending as rent that you owe to the landlord
- The amount that is pending on personal loans and mortgages that you have taken
- Due able amount in the shape of credit bills and utility bills
Quran sayings About Zakat Assets:
The list of assets is based on the reference to Quranic ayath and is rather general.
In Surah Al-Baqarah, it is mentioned that;
Believers! Spend (in the Way of Allah) out of the good things you have earned and out of what We have produced for you from the earth, and choose not for your spending the bad things such as you yourselves would not accept or accept only by overlooking its defects.
According to the Ayath:
The Zakat paid in the era of the Holy Prophet Muhammad (صلى الله عليه وآله وسلم) was in the shape of:
- Gold & Silver
- Agricultural output
- Goods for trade
Items exempt from the zakat list are used for personal purposes, such as household furniture and clothes.
Who are eligible to Receive Zakat (Masarif-e-Zakat)?
We have already discussed who is eligible for Zakat? Now let’s know about Masarif-e-Zakat. Masarif-e-Zakat means the recipients of Zakat or people eligible to receive Zakat.
Masarif-e-Zakat is the “recipient of Zakat” or those eligible to receive Zakat. Whether it is the Zakat of dignity or the Zakat of Shria, the Masarif-e-Zakat remains the same.
In Surah Tauba (9:60), Allah Almighty has categorized the Masarif-e-Zakat:
The Charity (alms/sadaqah) are only for the poor and the needy, and those who collect them, and those whose hearts are to be reconciled, and to free the captives and the debtors, and for the cause of Allah, and (for) the wayfarer; a duty imposed by Allah. Allah is Knower, Wise.
According to the above Ayah of the Quran, the following are the 8 categories of Masarif-e-Zakat:
- Poor & Low-Income individuals (Fuqarah)
- Needy Muslims who lack basic facilities (Masakeen)
- Officials appointed at the collection of Zakat (Aamileen)
- New unprivileged Muslims incline their hearts toward religion even more (Muallafat-ul-Quloob)
- Captives & Slaves, to set them free (Ar-Riqaab)
- Muslims who are in debt (Al-Gharimeen)
- Muslims who are in need and away from their home to perform Islamic obligations like Jihad or Hajj (Fi Sabeelillah)
- A Muslim traveler who is in need during their journey (Ibn-us-Sabeel)
The social, economic and spiritual Importance of Zakat:
Zakat is mentioned in Holy Quran around 82 times in the Holy Quran, and it states the importance of duty. Zakat has deep importance in Islamic society. Society gets benefits socially, economically and spiritually such as:
- It eliminates social conflicts and establishes balance and security
- Poverty is reduced and promotes selflessness.
- Create the gap between upper and lower classes
- Provide financial help to needy people
Frequently Asked Questions About Zakat:
Here are frequently asked question about zakat;
1. How is Zakat Calculated?
Zakat is calculated as 2.5% percent of your savings and financial assets not used for living expenses. You can also use the Zakat calculator to calculate zakat according to the Nisab.
2. Who is Eligible to Pay zakat?
A person with cash or assets above the Nisab limit can pay zakat.
3. Who is Sahib-e-Nisab?
Sahib-e-Nisab is a person who has assets valued at more than 87.48 grams/7.5 tola of gold or 612.36 grams/52.5 tola silver for the entire lunar year.
4. Is zakat Payable on Personal Use Items?
No, Zakat is only due to being paid on all assets that are more than your personal use.
5. Is it Important to Use the Rate of Gold and Silver in Local Currency?
Yes, it is important for ease of calculation; therefore, if you live in Pakistan, you must convert all assets into PKR.
So that’s all for now! We hope the blog will prove to be a comprehensive guide for your queries related to Zakat. Stay in touch with realtorspk.com for the latest news and information. Remember that Zakat builds the connection with Allah Almighty and purifies wealth. It develops a feeling that everything and everyone belongs to only Him, and worldly wealth is temporary. Ramadan Kareem!