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Zakat, one of the five pillars of Islam, is a fundamental aspect of the faith that emphasizes social responsibility and the redistribution of wealth to the less fortunate.

Charitable giving, or Sadaqah, is another form of almsgiving in Islam that fosters compassion and generosity among the faithful.

This article explores the concept of Zakat and charitable giving in Islam, the importance of fulfilling these financial obligations, and their impact on individuals and society.

Zakat: One of the 5 Pillars of Islam

The Arabic term Zakat, meaning “purification” and “growth,” refers to a mandatory form of almsgiving that all eligible Muslims must perform. This practice is considered an act of worship and an essential component of Islamic finance and wealth distribution.

By giving a portion of their wealth to those in need, Muslims purify their remaining wealth and earn spiritual rewards from Allah.

Zakat is not merely a financial obligation but also a means to attain spiritual growth, promote social justice, and reduce poverty. Giving Zakat helps Muslims detach themselves from materialism and fosters empathy and compassion towards the less fortunate.

“Be mindful of your duty to Allah; perform your five daily salah, observe sawn during the month of Ramadan, pay the zakat on your properties, and obey your leaders; (if you do so) you will enter Jannah of your Rabb.”

(al-Tirmidhi)

Types of Zakat

Muslims are responsible for fulfilling two kinds of Zakat: Zakat Al-Mal, which pertains to wealth, and Zakat Al-Fitr, known as the Zakat, for concluding the fasting period of Ramadan.

Zakat al-fitr is a mandatory contribution individuals make for themselves and their dependents, ensuring the less fortunate can partake in the festivities of Eid al-Fitr. This zakah is specifically allocated for the consumption needs of the poor and needy.

On the other hand, zakat al-mal refers to the obligation of Muslims to give zakah on their accumulated wealth once it surpasses a specific nisab (minimum threshold) and has been in their possession for a lunar year. Zakat al-mal is often simply referred to as zakah and serves as a means to purify one’s wealth and fulfill their social responsibility.

Zakah Eligibility and Calculation

The nisab thresholds differ for various types of assets, and each category has its own rate of collection by the government. When the wealth amount falls below the prescribed nisab, it is expected to be exempt from zakah. In certain ways, zakah resembles taxation since it follows a fixed rate for each type of wealth, similar to a proportional tax system. For example, the nisab for savings is set at 85g/3oz of pure gold, while the corresponding zakah rate is fixed at 2.5 percent.

Zakah is levied on the wealth of an individual who meets the following criteria:

  • Being an adult of sound mind, freedom, solvency, and being Muslim.
  • Possessing wealth, excluding personal necessities, that surpasses the nisab threshold.
  • The wealth must be held for an entire lunar year.
  • Zakah is not applicable to personal residences.

The Beneficiaries of Zakat

The Quran specifies eight categories of people who are eligible to receive Zakat (Quran 9:60). These are:

  1. The poor (Al-Fuqara’): Those with insufficient means to meet their basic needs.
  2. The needy (Al-Masakin): Those who may have some income but still struggle to make ends meet.
  3. Zakat collectors (Al-‘Amilina ‘Alaiha): Those employed to collect, distribute and manage Zakat funds.
  4. New converts (Al-Mu’allafatu Qulubuhum): Individuals who have recently embraced Islam and need financial support.
  5. Slaves and captives (Ar-Riqab): Donors can use Zakat funds to free slaves or assist those unjustly held captive.
  6. Debtors (Al-Gharimin): People burdened by debt and unable to repay it due to genuine reasons.
  7. In the cause of Allah (Fi Sabilillah): Donors can allocate funds for religious and charitable purposes, such as constructing mosques, schools, and hospitals.
  8. The stranded traveler (Ibn as-Sabil): Travelers who need financial assistance during their journey.

Charitable Giving: Sadaqah

Sadaqah, which originates from the Arabic root word “sidq,” meaning sincerity, represents voluntary charitable giving in Islam. Anyone can perform it at any time without specific rules or limitations as an act of kindness and generosity.

In contrast to the obligatory nature of Zakat, Sadaqah is purely voluntary and can take various forms, including money, time, knowledge, or even a simple smile.

Sadaqah serves as a demonstration of one’s faith and commitment to helping others. Unlike Zakat, Sadaqah has no fixed amount or specific beneficiaries, allowing individuals to give it to anyone in need, regardless of religion, race, or social status.

The Quran encourages Muslims to give Sadaqah regularly, as it helps to purify their souls, increase their blessings, and bring them closer to Allah.

Main Difference between Zakat and Sadaqah

Zakat is a mandatory form of charity and one of the five pillars of Islam. It involves donating 2.5% of one’s wealth when it reaches a certain amount or “nisab” to those in need to prevent wealth concentration and promote wealth purification. In some countries, like Yemen, Sudan, Libya, Saudi Arabia, Malaysia, and Pakistan, Zakat is collected by the government.

On the other hand, Sadaqah is a voluntary act of charity without a pre-set amount, often given to help those truly in need. It can take various forms, such as visiting the sick, attending a funeral, or assisting someone in need.

The Benefits of Zakat and Sadaqah

Fulfilling the financial obligations of Zakat and Sadaqah brings numerous benefits to individuals and society. Some of these benefits include:

  • Spiritual Growth: Giving in the way of Allah purifies the heart, promotes humility, and strengthens one’s faith. It serves as a reminder that material possessions are temporary and that true wealth lies in spiritual development and good deeds.
  • Social Cohesion: Zakat and Sadaqah foster a sense of unity and brotherhood within the Muslim community. They promote empathy and understanding, encouraging Muslims to care for one another and support those in need.
  • Economic Stability: The redistribution of wealth through Zakat and Sadaqah helps to alleviate poverty, reduce income inequality, and create a more balanced and stable economy. This, in turn, leads to increased social harmony and a more just society.
  • Personal Satisfaction: Giving to others instills a sense of fulfillment and contentment, as individuals know that their wealth positively impacts the lives of those less fortunate.
  • Divine Rewards: Muslims believe that Allah rewards those who give to His cause with increased blessings, protection, and guidance. By fulfilling their financial obligations, they hope to attain Allah’s pleasure and mercy, both in this life and the hereafter.

Conclusion

Zakat and Waqf are two key concepts in Islam that foster the spirit of giving and support within the community. In particular, Zakat is a compulsory donation for Muslims who earn above a certain threshold and serves as one of the five pillars of Islam. Individuals calculate this practice based on their income and the value of their possessions, and they must donate a minimum requirement of 2.5% of their total savings and wealth.

In contrast, Waqf is a voluntary endowment wherein individuals can donate money or assets to create a long-lasting benefit for the community, such as building a hospital or school. Once someone donates it, the waqf serves as an asset for public benefit and cannot be sold, providing service to generations to come.

Zakat and charitable giving are integral aspects of Islamic finance and social responsibility. They serve as a reminder of the importance of caring for the less fortunate and help to create a more just and compassionate society.

By fulfilling their financial obligations, Muslims not only attain spiritual growth and divine rewards but also contribute to the overall well-being of their community.

Consequently, Zakat and Sadaqah are essential practices that every eligible Muslim should strive to uphold in order to promote a more balanced, equitable, and harmonious world.

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