The word zakat means ‘purity’ or ‘to purify’; all Muslims who are wealthy enough, must purify their wealth through the act of giving in charity
Using value of silver – $458 | Using value of gold – $5,064
Every Muslim, sane adult, in possession of the nisab (the minimum amount of wealth that one must have before zakat is payable) for one whole year is liable to pay the zakat. See the current monetary nisab value above
Items from which wealth can be derived include: cattle, crops, gold, silver, and merchandise for business. Zakat Harta must be paid on cash deposits held in bank accounts.
For personal items that one cannot derive wealth from, such as cars, clothing, shelter, furniture and which are not to be used for trade, are not included when calculating zakat.
One must not only have the minimum amount of nisab but it must have been in one’s possession for one whole year. Ramadan is chosen by many as the month in which they pay their zakat; both to remember it, and also because the reward for good deeds done in this blessed month is multiplied.
Islamic Relief utilises zakat to help some of the poorest, most needy, and the most destitute people on the planet. Your zakat donations bring joy to these people, who know that their brothers and sisters all over the world haven’t forgotten them.
Your zakat donations gives hope to the poor; that one day and with the help of Allah (swt), they will be zakat givers and not zakat receivers.
According to the Hanafi madhab, all Gold and Silver you own, must be included as part of your Assets in the Zakat calculation.
However, in the Shafi madhab, any Gold and Silver that is for personal use, does not need to be included as part of your Assets.
If all of your wealth is in Gold, the value of the Gold you own must be at or above the Gold Nisab, to be eligible to pay Zakat.
If your wealth is a mixture of Gold and/or Silver and cash, it is ideal to use the Silver Nisab threshold.
If you possess Shares for the purposes of trading. Then you must include the value of the shares in your Assets.
However, if the Shares you possess are not for trading, but rather held as an investment, to deliver dividends, then it is only the dividends that need to be counted in your Assets.
The same rule applies to property trading. If a property is purchased with an intention to resell it, then the value of it must be counted in your Assets.
However, if a property is bought as an investment [to be let out], with the only benefit being the rental income, it is the profit [in the bank] that is eligible to be counted under your Assets.
Business stock has to be counted as an Asset for Zakat purposes. The value to be used is what would appear on your Balance Sheet. Usually, it is the cost of purchasing the stock.
Business premises doe not need to be counted as an Asset in the calculation. Any property the business owns [land, retail units, etc.] also don’t need to be counted as Assets.
A long term mortgage is not to be counted as a Liability in your Zakat calculation.
Loans that are taken out for a Personal purpose, can be subtracted as a Liability in the Zakat calculation.