(MINIMUM EXEMPTION LIMIT)
Nisab is the minimum limit of wealth or property on which Zakat becomes payable ; the person having that much of property is called Sahib (possessor of) Nisab.
Economic Justice and Equilibrium
One basic aim of the Zakat system is to create economic equilibrium in society. In order to keep wealth in circulation and give its benefit to every stratum of society. Zakat is taken from the wealthy and distributed among the poor. The Holy Prophet has said :
“Allah has enjoined Sadaqat (charity) which should be taken from the well-to-do and returned to the indigent.”The Shari’ah regards all such people wealthy and well-to-do as possess property equal to or exceeding he Nisab, which remains with them for at least a year. In the time of the Holy Prophet, wealthy people were those who owned dae gardens, or gold and silver, or animals. The Shari’ah has fixed different Nisabs for different kinds of Property. The Holy Prophet has said :
“There is no Zakat on dates if they are less than five wasaqs and there is no Zakat on silver if it is less than five auqias, and there is no Zakat on camels if they are less than five in number”.Shah Walliullah has explained that in the time of the Holy Prophet five wasaqs of dates were enough for an average family for the whole year, and the same was the value of five auqias of silver, and of five camels. That is why a person who possessed that much property was regarded wealthy and was required to pay Zakat.
Question of Re-fixation of Nisab
Due to excessive devaluations of currency in almost every country and the great difference in the value of Nisab in gold, silver and animals as against that in the time of the Holy Prophet, some people have used that the religious scholars should consider re-fixation of the Nisab of Zakat. In response to one such questioner, Maulana Maududi writes :
“No change was effected in the Nisab and the rate of Zakat fixed by the Holy Prophet during the time of the rightly-guided Caliphs, nor is there any need to effect a change now. In my opinion, nobody is authorised to introduce any change or modification in the rates fixed by Holy Prophet However, the Nisab of gold (20 mithqals or 3 oz.) may be modified because the tradition reporting it is not well authenticated”.Replying to another question, the Maulana has claborated the wisdom of not changing the rates of Nisab and Zakat as follows :
“We are not authorized to effect any change in the limits and rates fixed by the Law-giver. If the door to changes is once opened, it will not remain confined to the Nisab and the rate of Zakat, but will certainly lead to modification, and even annulment, of other important laws pertaining to, for instance, etc. and this process will never come to an end. I will disrupt the balance and equilibrium created by the Law-give between the individual society, which will give birth to an ever-increasing conflict. The individual will naturally like that the change or modification should be in his interest and the society will like to have the changes effected to its own benefit. Then it might be made an election issue by the vested interests. For instance, if the Nisab is educed and the rate enhanced, the affected people will not practise Zakat willingly, as an act of worship should be, but will pay it as a penalty as a tax, and will even try to evade it on one pretext or the other. If the Nisab and rate of Zakat ae made subject to the whim of the majority in the parliament, the present system under which people willingly submit to a Divine Command and pay Zakat in the spirit of an act of worship, will cease to exist”.Nisab of Gold and Silver
The Nisab for silver is 200 dirhams or 36 tolas, 5 ½ mashas (nearly 14 ½ oz.) and for gold 20 mithqals or 5 tolas and 2 ½ mashas (about 2 oz.)
A person having this much of silver or gold, which remains with him for a whole yer, will have to pay Zakat on it. For lesser quantities there is no Zakat.
Zakat on Hard Currency and Notes
The currency issued by a government in the shape of coins of any metal or paper notes is subject to Zakat on account of its purchasing power. It actually represents silver and gold. Therefore, if the amount of currency possessed by a person equals the value of he Nisab for silver, he will have to pay Zakat on it. The coins which he no longer legal tender, or have been withdrawn by the Government, will be subject to Zakat only to the exent of the amount of silver or gold they contain. If a person possesses foreign currency which can be easily exchanged, it will be regarded s cash and will be subject to Zakat, otherwise not. However, if it contains silver or gold to the extent of the Nisab, Zakat will become payable on it.
Weight of a Dirham
In the times of the Holy Prophet and Hadat Abu Bakr, dirham was of different weights. Hadrat ‘Umar felt the difficulty of the resulting confusion in the payment of Zakat. To resolve the problem he got three dirhams of different weights melted and made into three coins of equal weights ; each of he new coins weighed 14 qirats (about 2 mashas and 1 ½ rattis). This dirham then was agreed upon by all the Companions and it became current in the whole of Arabia as the standard for the payment of Zakat and fixation of punishment for theft, etc. (Bahr ar-Ra’iq). For the purpose of purification from impurity however, the dirham is to be taken as a coin of ½ inch radius, weighing about 3 grams.
Zakat on Trade Goods
The Nisab for trade goods, currency notes and coins is the same as for gold and silver, and Zakat is to be paid on the basis of the Nisab for gold and silver. To calculate Zakat on trade goods, one should reckon up the value of the stock in trade after the passage of full one year from the date the business was started, include the cash in hand, and pay Zakat if the total value equals or exceeds the Nisab. In case it is less, there will be no Zakat. Then if the prices suddenly rise and the value of the stock in trade and cash in hand equals or exceeds the Nisab, the Zakat year will commence from the date the prices increased.
In case of partnership trade, Zakat will not be payable on the combined stock in trade and cash in hand, but on the value f the share and profits of each partner if it equals or exceeds the Nisab otherwise not.3 Similarly if two or more persons possess a property jointly, Zakat will not be payable unless the share of each equals or exceeds the Nisab . However, there is no Zakat on tools and implements employed in business, or the furniture, stationery, building and other means of production. While working out Zakat, the loans that have been advanced or received back have also to be taken into account. Hadrat Samura bin Jundab says, “The Holy Prophet had enjoined on us to pay Zakat on our stocks in trade”. (Abu Dawud)Zakat on Ornaments
Zakat is payable on gold and silver in all forms, whether currency, bars, gold thread or lace woven into cloth, gold thread embroidered dresses, or ornaments for ladies, etc.
A woman from Yaman came to the Holy Prophet (peace and blessings of Allah be upon him) along with her daughter who was wearing two heavy bracelets of gold round her wrists. The Holy Prophet asked, “Do you pay Zakat for these?” The woman replied in the negative, whereupon the Holy Prophet said : “ Do you like that on the Day of Rising Allah punishes you with two bracelets of fire round your wrists ?” Hearing this the woman removed the bracelets and presented them to the Holy Prophet with a view to wining Allah and His Prophet’s approval. (Nasa’I)Hadrat Umm Salmah says that she used to put on (gold) bracelets. When she asked the Holy Prophet whether it was kanz (hoarded wealth), he replied :
“When a piece of property reaches up to the prescribed limit and Zakat is duly paid on it, it is not kanz”. (Abu Dawud)Maulana Maududi has written an explanatory note regarding Zakat on ornaments, which is translated as follows ;
“There are a number of views
about Zakat on ornaments which are as follows :
2. Zakat on ornaments is due only once in a lifetime.
3. There is no Zakat on the ornaments that a woman is constantly wearing, but Zakat has to be paid on the ornaments which she has put away and are not in use.
4. Zakat has to be paid regularly on all kinds of ornaments.
We concur in the last mentioned view. The traditions which impose the duty of Zakat on ornaments of gold and silver are generally of the following type :
“The rate of Zakat on silver is 2 ½%. and there is no Zakat on less than five auqias of silver”.
In a number of other traditions, Zakat has been clearly enjoined upon ornaments. For instance, the following is a well authenticated Hadith reported by Abu Dawud, Tirmidhi and Nasa’i :
“A woman came before the Holy Prophet along with her daughter who was wearing bracelets of gold round her wrists. The Holy Prophet asked, ‘Do you pay Zakat for these? On hearing that she did not, the Holy Prophet remarked : ‘Would you like that Allah gives you bracelets of fire instead of these on the Day of Rising ?”In Mu’watta, Abu Dawud and Daraqutni, another Hadith has been reported to the effect :
“The ornaments for which you have paid Zakat duly are not included in kanz (hoarded wealth)”.As reported by Ibn Hazm in Muhalla, the mandate given by Hadrat ‘Umar to his Governor, hadrat Abu Musa Ash’ari, contained the following instruction :
“Enjoin Muslim women to pay Zakat on their ornaments”.When Hadrat ‘Abdullah bin Mass’ud was asked to give his opinion regarding Zakat on ornaments, he replied :
“When their value amounts up to 200 dirhams, they become subject to Zakat”.Sayings to the same effect have been reported from Companions like Ibn ‘Abbas, ‘Abdullah bin ‘Amr bin ‘As and Hadrat ‘A’ishah, from followers of the Companions like Sa’id bin al Musayyab, Sa’id bin Jubair, Ata’, Mujahid, Ibn Sirin and Zuhri, and from doctors of law like Sufyan Thauri, Abu Hanifah and his pupils.” (Rasa’il-o-Masa’il, Vol. II, pp. 123-124)
Rate of Zakat
1. Zakat is obligatory at a uniform rate of 2 ½ %., i.e. one-fortieth part of gold, silver, trade goods,, metal coins currency notes and ornaments.
2. Zakat may be paid in kind at one-fortieth of gold, silver or ornaments, or its value in cash, or one way give away clothes, etc.
3. If a person possesses a quantity of gold or silver or trade goods which is a little in excess of the laid down Nisab, Zakat will be obligatory if the exress part equals or exceeds 1/5th of the Nisab, otherewise not. (‘Ilm al-Fiqh)
4. If gold and silver are mixed together in an ornament, or a bar, or inter-woven in cloth, it will be ascertained which metal is greater in quantity. If gold is found to be greater, the whole ornament or bar will be considered golden and Zakat paid according to the Nisab of gold, and if silver is found to be greater, the whole ornament or bar will be considered of silver and Zakat paid according to the Nisab of silver.
5. If golden or silver ornament contains some element of a metal of lower value, it will be ignored and the ornament considered of gold or silver and Zakat paid according to the relevant Nisab ; however, if the element of gold or silver in the ornament is small, Zakat will be paid if this element comes up to the relevant, Nisab, otherwise not.
6. If a person possesses some gold and some silver, and one of these amounts to the relevant Nisab, he should convert gold into silver or silver into gold and pay Zakat at 2 ½ p.c. on either Nisab attained. Similarly, if he possesses some cash, some silver and some trade goods, he should pay Zakat if the combined value reaches up to the Nisab of either gold or silver.
7. No Zakat is due on pearls and gems contained in ornaments. Their weight will be deducted and Zakat paid at 2 ½ p.c. on gold or silver as the case be.
Properties Exempt from Zakat
1. There is no Zakat on the house which is in the personal use of the owner, no matter how costly or valuable it be.
2. There is no Zakat on pearls, rubies and other diamonds.
3. Camels, oxen, buffaloes, etc. reared for use in agriculture are exempt from Zakat the principle being that no Zakat is due on the means of production. A tradition says : “The camels employed in agriculture are exempt from Zakat”. Similarly there is no Zakat on the tools and implements used for producing wealth.
4. The machinery used in a factory, its building, furniture, stationery, etc. are exempted from Zakat.
5. There is no Zakat on the cattle of a dairy farm, because they are only means of production; the dairy products, however, are subject to Zakat.
6. Costly and rare articles kept by a person as a hobby are not subject to Zakat ; if, however, they are kept as trade goods, Zakat will be payable on them just as it is on other merchandise.
7. If a person breeds fish in a pool as hobby, no Zakat will be imposed on them, but if he trades on them, Zakat will have to be paid.
8. Cattle like cows, buffaloes, etc. which are reared for personal use for milk, or camels and oxen kept as a means of transportation, or horses for conveyance, are not subject to Zakat, even if they are quite a few in number.
9. Similarly, if a person possesses a motor cycle, a car, or a bus as a personal conveyance, there is no Zakat on it.
10. Poultry is also exempted from Zakat, but if eggs or chickens are sold, Zakat will become due as it is on other trade goods.
11. There is no Zakat on bicycles, rickshaws, taxis, buses, trucks, furniture , crockery, etc. which are given on hire, but if the profits amount up to the Nisab and a year passes over them, Zakat will become obligatory.
12. Rented houses and shops are exempt from Zakat, but not the rents, if conditions of Nisab, etc. are fulfilled.
13. No Zakat is due on wearing clothes, blankets, cap, shoes, watch, pen, bed, things of daily use in the house, etc. whatever their cost and value.
14. There is no Zakat on trust-properties including animals, and no Zakat on weapons and equipments of war and on horses reared for the purpose of Jihad or the service of Islam.
ZAKAT ON ANIMALS
Pasturing cattle reared for procreation and milk purposes, which are termed Saimah, are subject to Zakat,but the riding animals or those meant to be slaughtered for food, or wild animals like the deer, antelope, etc. are exempted from Zakat, unless they are reared for trade purposes in which case they will be subject to Zakat like other trade goods,. Animals produced by cross-breeding between domestic and wild animals will be subject to Zakat provided that the female was domestic and the male wild, Instance : The cross-bred animals produced by a she-goat and a male deer will be subject to Zakat, but not otherwise.
Sa’imah animals or horses belonging to a trust, or horses for the purpose of Jihad are exempted from Zakat. If Sa’imah animals have been reared for Zakat, they will be subject to the same rate of Zakat as other trade goods.
If a person is rearing cattle for procreation, but then changes his mind during the year and wants to trade in them, he will not be required to discharge Zakat for that year ; Zakat will become leviable from the day he changed his mind and will be calculated at the completion of the trade year.
Nisab and Rate for Sheep and Goats
The goats and sheep of all kinds are treated alike for the purpose of Zakat and have the same Nisab and rate. If a person possesses both sheep and goats, each qualifying for Nisab, he will have to pay Zakat separately for each category. However, if the number of one category falls short of Nisab, he will combine the two and give away in Zakat an animal or animals belonging to the larger class. If the number of animals in both classes is equal, he will have the option to give away any animal.
Zakat will be calculated on the basis of the following Nisab and rates :
For 40 to 120 goats and sheep: one goat or sheep of a year or more.
For 121 to 200 goats and
sheep: two goats or sheep
Nisab and Rate for Cows and Buffaloes
Cows and Buffaloes have been treated alike for the purposes of Zakat and have the same Nisab and rate of disposal. If a person possesses both categories of the animals, and they make up the Nisab, Zakat will become payable; the animal taken out in Zakat will be from the larger category; if the number is equal one will have the option to take out an animal from either category.
The Nisab and rates are as follows :
Zakat is leviable if a person possesses 30 cows or buffaloes, or both. Thus
For 30 to 39 cows or
buffaloes: one calf of a year or more.
Instance : A person having 70 cows and buffaloes will pay Zakat on two Nisabs : on the first 40 cows and buffaloes, he will give out a two year old calf and on the remaining 30, a one-year-old calf. In case he possesses 80 cows and buffaloes, he will be required to give away two calves, each being two-year-old one each for the two Nisabs of 40 each, and in case he possesses 90 cows and buffaloes, he will be required to give away three one-year-old calves, one each for the three Nisabs of 30 each.
Nisab and Rates for Camels
A person having 5 camels is owner of Nisab and will pay Zakat at the following rates :
For 5 to 9 camels :
one goat ;
Zakat on gold, silver
(whether ornaments or bullion), or animals may be paid in kind or in cash
according to the current rates of the market.