Zakat is a religious duty; proceeds of which are given to the poor. It is one of the five pillars of Islamic charities focused on the season of Ramadan. Though surrounded by various conditions, it is obligatory for all Muslim brothers and sisters to pay their due. Its mandate is based on a due date and Nisâb.
Typically, when using an online zakat calculator or app, it requires some important personal financial information. It will require the amount of a Muslims individual and business cash on hand from both savings and checking bank accounts. It will ask for ones liabilities, expected tax refund, refundable deposits, and business inventory. It will also require the amount of money loaned to other people, or non-delinquent loans. It will also ask for ones amount of gold stashed and its certificates. A Muslim will also be requested to provide the amount of ones net income based on the Zakats due date. Muslims are also asked to provide their pension plans and market bonds, stocks, and shares.
Zakat Basic Conditions
A Zakat becomes obligatory on three conditions: (1) a person is a Muslim; (2) a Muslims wealth and assets, subject to Zakat calculation, reaches the minimum limit; and (3) when the minimum limit is reached before a lunar year is over. In addition, unlike with other religious obligations of Islam, age and the psychological well-being of a Muslim person is not an issue of eligibility for paying Zakat. In other words, because Zakat is viewed as a right of the poor, it does not matter from whom it came from, as long as the conditions are strictly met.
Zakat is not imposed on a specified amount of wealth. It is only applied on wealth that has reached a specified limit called the Nisâb (origin or beginning). It is determined differently for each type of asset. Assets subject to Zakat calculation include personal wealth, business wealth, trade goods, exploited assets, agricultural produce, irrigated and non-irrigated crops, livestock, and treasure troves. It does not include existing necessities such as a persons current vehicle, clothes, stored food, and current residence including furniture, fixtures, and appliances. As a general rule, a Muslims wealth that does not exceed Nisâb is exempted from being calculated for Zakat. The best way to calculate Nisâb however, is by using a Zakat calculator.
The Lunar Year Due Date
Though the month of Ramadan is the best time to donate Zakat, it is subject to a due date determined by a lunar year. It means that after 12 full lunar months, Zakat is due. This can be determined either from the date Zakat was paid the previous year, or by the first day Nisâb was acquired. However, this is only applicable to business assets, money, and livestock. Zakat on treasures, metals, and crops are only due after they are harvested or mined.
Correct Zakat Calculation
Each Muslim determines Zakat differently based on Nisâb and a lunar year due date. This makes it hard to correctly calculate it in general. The most practical way to compute it would be to specify a date on a lunar calendar, calculate Zakat on that date, and then use that same date to pay Zakat yearly. For more accurate results, use a Zakat calculator instead.