Goods That Are Subject to Zakat (Shafii)

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What are the zakat of goods in islam? Can zakat be given as goods?

Zakat is given on five types of goods:

  1. Gold, Silver and Banknotes
  2. Commercial commodities
  3. Mines and treasures
  4. Certain crops
  5. Certain animals (Sheep, goat, cattle and camel)

a. Zakat on Gold, Silver and Banknotes

The nisab amount for gold is twenty mithqal (85 gr) and for silver two hundred dirhams (595 gr). Allah’s Messenger (pbuh) said, “There is no zakat in gold less than 20 mithqal and in silver less than 200 dirhams.”[1]

As for gold and silver, there is no difference between them if they are in bullions or processed form. Gold dinars, silver dirhams, all kinds of processed gold and silver bracelets, necklaces, watches, badges, tie clips etc. are subject to zakat. All kinds of household items made from gold or silver or decorated with gold or silver are subject to zakat even though it is forbidden to have such items at home and to use them.

On the other hand, there is no zakat on ornaments and jewelries that are permissible to utilize. These are the ornaments used by Muslim women according to the customs and traditions without exaggeration (wasting) and which do not exceed the amount of 200 mithqals of gold. According to the Shafii School, if woman’s ornaments are 200 mithqals or more, it is considered extravagance, because this exceeds the customs and traditions, one needs to pay its zakat. According to the Hanafi School, if woman’s ornaments exceed 20 mithqals, it becomes subject to the zakat.

Other jewelries such as pearl, emerald, or ruby used by women as ornaments are not subject to zakat. However, if they are hold in hand for trade, they become subject to zakat.

The banknotes and coins used today as the forms of money instead of gold and silver, securities, cheques, and stocks are subject to the same ruling as gold. Therefore, one should pay their zakat. The amount of nisab for money and foreign currencies is calculated according to the amount of nisab for gold.[2] When the value of money and foreign currencies reaches the value of 85 grams of gold, they become subject to zakat.

The ration of zakat in gold, silver and money is 1/40 or 2.5 percent. If one, who has cash, gold and silver, adds his certain receivable debts to them and if it reaches more than the value of 85 grams of gold, he is considered wealthy. One who has money equal to or more than the value of 85 grams of gold at the end of a year excluding his necessities must give one fortieth of his money as zakat.

One does not have to combine his gold and silver, each of which is under the amount of nisab, in order to reach the amount of nisab in total. According to other schools, one needs to combine them and if the total amount is more than the nisab, he must pay one fortieth of the total amount as zakat to the poor.

If one who does not own a house saves money to buy a house and a year passes over his savings, which is more than the amount of nisab, he must pay zakat of his savings. If the money, which is more than the amount of nisab, is deposited to profit and loss sharing accounts, like in the institutions of Islamic finance, he needs to pay zakat one fortieth of both the capital and its profit at the end of the year.

Zakat of gold, silver, and cash should be in the form of cash. It is not permissible to give any other goods in the same value to the poor instead of cash. If one gives cash to his deputy or to the officer of zakat to distribute it as his zakat, then the same cash should be given to the poor. In other words, he cannot buy clothes and food and distribute them among the poor as zakat.

b. Zakat on commercial commodities

Believers are commanded in the Qur’an to give zakat out of their commercial commodities:

“O you who believe! Give of the good things which ye have (honorably) earned…”[3]

The following conditions should be met in order for the commercial commodities to be subject to zakat:

  • All assets, which are obtained in order to be traded and to make profit, are subject to zakat. The assets bought by a merchant with advance payments or with instalments become subject to zakat because they are commercial commodities. However, if the assets in the hands of a merchant is obtained at no cost, such as through inheritance, he does not have to pay zakat out of them unless he deals with them with the intention to make trade.
  • No matter what type the commercial commodity is, if its value is more than the amount of nisab for gold.
  • Thus, in order to consider an asset a commercial commodity, it should involve two elements -the action of buying or selling, and the intention of making profit. If one of them does not exist, the asset is not considered a commercial commodity. These two elements must always co-exist in trade. Buying for the intention of using the asset is not trade. Items bought for personal and household use are not trade assets. If the merchant intends to keep an item for personal use, the requirement of the passage of a year ceases. When he changes his intention and decides to use it for trade, the process begins again.
  • One lunar year should pass after obtaining the trade assets. It does not become obligatory to pay its zakat before one lunar year passes over it.
  • If the merchant liquidates the entire trade assets he has for less than the amount of nisab during the year, the requirement of the passage of a lunar year will not be sought. If the merchant buys another trade asset by this money, the requirement of the passage of a lunar year begins again on the date he buys the assets. However, if the merchant liquidates part of the trade assets he has for less than the amount of nisab, keeps the rest as trade asset and sells all of them at the end of the year, the requirement for the passage of the lunar year does not halt, but rather continues.
  • Zakat in commercial commodities is paid not only from the profit but also from the capital as well. Even if the merchant makes loss, he must still pay zakat as long as his capital is above the nisab level. If the value of trade assets is above nisab level at the end of the year, zakat is paid based on their value at the end of the year. For example, a merchant who begins trade with more than nisab level of money, 20000 TL on Ramadan 5th, and a year later on Ramadan 5th the value of his assets reaches 40000 TL, his zakat must be calculated based on 40.000 TL and 1000TL is paid out as his zakat. The increases and decreases during the year are not taken into account. Passage of a lunar year over the profit is not required.
  • If the trade assets are animals grazed in pastures or kind of fruits and if they reach the nisab level in both value and amount, their zakat should be paid in their kind. If such trade assets reaches the amount of nisab in value, their zakat is paid in accordance with the rules of zakat of trade assets. The ratio of zakat in trade assets is one fortieth.

One should pay one fortieth zakat on houses, buildings, shops, cars or all kinds of other immovable that are obtained for the purpose of trade. The value of trade assets are determined based on currency in circulation and their zakat is paid based on their value. Even if an asset has not been sold, yet, if it is in the market for sale or if someone is deputized to sell it, it is accepted as trade asset and becomes subject to zakat.

One is not required to pay zakat out of factory buildings, machinery, shops, workbenches, busses or cars used for all kinds of commercial transportation, and all kinds of fixed capital. which all are considered un-increasing types of wealth. Likewise, books and tools of artisans are not subject to zakat. However, if they are obtained not to use but to trade, they become trade assets and their zakat must be paid.

If the raw materials such as iron used in construction of houses and producing cars or olive oil used in soap production stay in the hands of architect and businessperson for longer than a year, their value should be calculated and their zakat should be paid. In like manner, the animals or plants held in hand to be made canned food are subject to same rules.

The shares traded in stock exchange market are like commercial commodities and they are subject to zakat with the ratio of one fortieth (i.e. 2.5 %) just like other trade assets.

Every partner in a company must calculate his/her zakat by considering all his wealth.  However, if the company has agreed in its main contract to authorize company administration to pay the company’s zakat, the payments made by company administration fulfill the company’s zakat payment requirement.

The partnership established to make profit by providing entrepreneurship from one partner and capital from the other is called mudaraba partnership (commenda). In such a partnership, the partner who provides the capital pays zakat for both his capital and the profit share. The entrepreneur pays only zakat out of his profit share. In order for zakat to become obligatory to pay over the profit, one lunar years should pass over it.

c. Zakat on mines and treasures (Rikaz)

Rikaz is a common term used in Islamic law to refer to mines, treasures, and all kinds of valuable items buried and hidden by people underground. Rikaz can be of different types. The ones that are found naturally under the ground are called ma’adin sing. Ma’dan (mines), and the one that are buried by people are called kanz (treasure).

According to the Shafii School, ma’dan is extracted from under the ground and specifically refers to gold and silver. As for other metals, such as iron, copper, lead, and others, no zakat is due on them if they are thus extracted. In this respect, no distinction is made among different ma’dan like materials based on whether they are solid, liquescent, rendered malleable by fire, or otherwise. 2.5 % is the zakat due on gold, when it is more than 85 grams, and silver, when it is more than 595 grams after having been purified and cast. It is not necessary that one owns them for an entire year before doing so.

According to the Hanbalis, the term ma’dan includes everything that has been produced by the earth and which is, nevertheless, distinct from it. Such a substance might be solid, such as gold, silver, crystal, agate, copper, antimony, etc., or liquescent, such as arsenic, petroleum, etc. The classical view that excludes all materials other than gold and silver from the obligation of zakat is because those materials had no economic value in their time. On the basis of the command of zakat, the purpose still exists, which is to take a share from the wealth and distribute it among the needy and the poor. In this regard, all kinds of economically valuable mines, such as marble, petroleum, boron, and etcetera are subject to zakat if their value reaches the nisab limit of gold. Their zakat is paid without waiting a year in the ratio of 2.5 percentage.[4]

According to the majority of scholars, nothing is due on substances extracted from the sea and cannot be smelted by fire, such as ambergris, pearls, coral, fish, etc. unless they are to be put to commercial use.  However, according to Abu Yusuf, one needs to pay zakat also on substances extracted from the sea and cannot be smelted by fire, such as ambergris, pearls, coral, fish, etc.

To pay zakat on treasures it is not a requirement to wait one lunar year to pass after they are found. In order for treasures to be subject to zakat, their value should be equal or more than the nisab level of gold. The person who finds the treasure must be a Muslim, free, and an adult. Their zakat should also be given to the eligible recipients of other types of zakat. (According to the Hanafi School, minerals/metals (al-ma’dan) and kanz (treasures) refer to the same thing; in other words, they are both, legally speaking, wealth which has been found under the ground, be it naturally occurring metals (metals Allah Almighty has created under the ground without any human being placing them there) or a treasure which was buried by non-Muslims. If they reach the amount of 5 wasqs, then that is their nisab, and one fifth is paid as zakat. They are like fay’ (war booty obtained without fight) and their zakat can be spent for public benefit.)

The ratio of zakat on treasures is one fifth. The basis of one-fifth zakat is the following narration reported by Abu Hurayra (r.a.): “One fifth is compulsory on rikaz.”[5]

The gold and silver buried under the ground before the period of Islam are called kanz (treasure). Treasures are the rights of those who find and extract them. However, if it is determined based on certain signs that it belongs to the period of Islam, then they should be returned to their rightful owners. If their owner is unknown, they are like lost items. The ruling about lost items is to announce them for a certain period of time and look for their rightful owners. If the owner cannot be found within a year, then the treasure becomes the property of the finder.

d. Zakat on agricultural produce (Tithe)

One must pay zakat from agricultural produce grown out of the soil. This type of zakat is called ushr (tithe). This is stated in the Qur’an,

“…Eat of their fruit when it comes to fruition, and give [unto the poor]their due on harvest day…”[6]

Crops that can be stored without getting spoiled are subject to zakat. Date and grapes are the only fruits on which zakat is due. Wheat, barley, lentil, chickpea, rice, rye, fava beans, and corn are agricultural products of the type of grains. All these type of agricultural products can be stored.

The agricultural products that are under risk of being spoiled are not subject to zakat. Fruits such as peach, pomegranate, fig, apple, apricot as well as some other products like honey, olive, cotton, and saffron are not subject to zakat because they are not mentioned in the hadith. Allah’s Messenger (pbuh) mentions cucumber, melon, pomegranate, and fresh date among the agricultural products that are not subject to zakat. However, because such product can be stored for a long time by modern technology, it seems more appropriate to pay their zakat when they are more than the amount of nisab as required by the other schools of Islamic law.

According to the Hanafi School, all kinds of products grown out of the soil are subject to zakat. This view is based on the following hadith: “Tithe is obligatory in everything that grows out of earth.”[7]

Passage of a year is not a requirement for zakat in agricultural products and fruits. If they are harvested twice a year, their zakat should be paid at the time of their harvest. If part of the harvest gets destroyed, on should pay zakat for the remaining part.

In order for it to be a requirement to pay zakat on agricultural products and fruits, one does not have to be sane and adult, either. Even if the owner of the produce is a child or an insane person, their guardians are obliged to pay their zakat on their behalf.

In order for the agricultural products and fruits to be subject to zakat, they must be owned by a specific individual. No zakat is due on that which has been set aside as a religious endowment for the benefit of mosques, properly speaking, since it has no particular owner.[8] Similarly, no zakat is due on date palms in the open desert, since they are not owned by anyone in particular.

If agricultural crops or fruits have been watered by means of rainfall or from a river without the use of machinery, or if they have soaked up water through their roots as in the case of unirrigated crops, the zakat due on them is one-tenth. If they are watered by means of a waterwheel or a shadoof (a sweep) or with purchased water, the zakat due on them is one-half of one-tenth due to the intensive use of resources involved in their care. Allah’s Messenger (pbuh) said, “On a land irrigated by rain water or by natural water channels or if the land is wet due to a nearby water channel ushr (i.e. one-tenth) is compulsory (as zakat); and on the land irrigated by the well, half of an Ushr (i.e. one-twentieth) is compulsory (as zakat on the yield of the land).”[9] If, on the other hand, they have been watered by a combination of both methods, as when half the land has been watered by rainfall while the other half has been watered by means of a waterwheel, the zakat due is three fourths of one-tenth.

According to the majority of Muslim jurists, the nisab level of agricultural products is five wasqs (35 tins), and no zakat is due for less than this amount. These scholars base their view on the following hadiths: “No zakat is due on produce less than five wasqs.”[10] Imam Abu Hanifa and Zufar, on the other hand, hold the view that zakat is due on all agricultural products no matter if they are less or more.

There is no zakat due on grains and fruits less than five wasqs. Different products are not to be combined to reach the nisab amount.

Zakat on agricultural products is paid in kind. One cannot give another kind of produce or money equal to the value of the kind from which zakat is supposed to be paid.

After grains harden and fruits ripen, it becomes obligatory to pay their zakat.  It is not permissible to sell them before calculating their zakat. However, it is permissible to sell the produce after calculating its amount by experts. This is because after calculating their amount, zakat amount becomes a debt of the owner of the produce and it becomes definite on him.

If a piece of land is rented for cultivation, the lessee pays zakat on the harvest. If the land is leased because of participation between the landowner and lessee, every partner pays zakat in accordance with their shares in the participation.

When paying zakat on agricultural products, it is deemed inappropriate to deduct the expenses made for seed, fertilizers, pesticides, and labor.

As for whether honey is subject to zakat, there is not any authentic hadith transmitted from the Prophet (pbuh). While the Shafii and the Maliki Schools agree on that no zakat is due on honey, the Hanafi and the Hanbali Schools argue that it is subject to zakat.

e. Zakat on animals

The animals that are kept for their milk and wool, and freely graze and spend more than half of the year in pastures, are called “sa’ima”. Zakat is due on sa’ima camels, cattle, goats and sheep when their number reaches the level of nisab and a year passes.

Zakat is due on animals that can be offered as sacrifice. Animals such as horses, mules, donkeys etc. are not subject to zakat provided that they are not obtained for trade.

Animals that are fed most of the year in barns are called “alūfa”. Zakat on alūfa animals is regarded like trade assets and paid in the ratio of 1/40 or % 2.5 of their values. Animals who are fed in barns only for their milk, meat, and calves are accepted as capital if they are not sold and 2.5-percantage zakat is paid out of their profit.

The calves of animals are also included in the calculation of zakat. If more animals are added throughout the year to sa’ima animals the number of which is above nisab level at the beginning of the year, zakat is calculated based on the number of all animals at the end of the year. The ones added during the year are not subject to the requirement of the passage of a lunar year.

If zakat on animals is given in kind, it should be chosen neither from the best nor from the worst ones, but rather from the average ones.

Zakat on animals should be given in kind. It is not permissible to give money equal to the value of the animal which will be given as zakat. However, if it is necessary, there are exceptions of this rule. For example, if one looks for a sheep as zakat for five camels, but cannot find it, it is permissible for him to determine the value of a sheep and give it in cash as zakat.

It is a requirement to feed the animals for the purpose of their reproduction, meat, or milk. Therefore, the animals such as mules, donkeys, or oxen which are fed to carry loads, to mount, or to do some farm work are not subject to zakat. Jabir b. Abdullah (r.a.) said, “No zakat is due on the oxen used for plowing.” Horses that are used for mounting and carrying loads are not subject to zakat, either. However, if they are valuable horses obtained for commercial purposes, they are regarded as trade assets and one fortieth of their value must be given as zakat.

Zakat of Camels

The nisab amount for sa’ima camels is five

There is no zakat for the amount between 0 – 4 camels,

For the amount between 5 – 9 camels, zakat is one sheep,

For the amount between 10 – 14 camels, zakat is two sheep,

For the amount between 15 – 19 camels, zakat is three sheep

For the amount between 20 – 24 camels, zakat is four sheep

A two-year-old female camel is given as zakat for a camel when the count is between 25 – 35,

For the amount between 36 – 45 camels, zakat is a three-year old female camel

For the amount between 46 – 60 camels, zakat is a four-year old female camel

For the amount between 61 – 75 camels, zakat is a five-year old camel

For the amount between 76 – 90 camels, zakat is two three-year old female camels

For the amount between 91 – 120 camels, zakat is two four-year old female camels

The amounts of zakat for more camels are explained in detail in related chapters of Islamic law books. It is a condition that the camels given as zakat must be female.

Zakat for cattle and water buffaloes:

The nisab amount for sa’ima cattle is thirty.

There is no zakat for the amount between 0-29.

For the amount between 30 – 39, the zakat is a Male or female calf that has reached two years of age.

For the amount between 40 – 59, the zakat is a male or female calf that has reached three years of age.

After this, for every thirty cows (cattle), one two-year-old cow will be given as zakat. Moreover, for every forty cows, one two-year-old cow and for every forty cattle one three-year old will be given as zakat. For example, for sixty cows, one needs to give a two-year old calf as a zakat, but for seventy cattle, one three-year old calf is paid as zakat.

Zakat of sheep and goat:

The nisab amount for sa’ima sheep and goat is forty, and their zakat is calculated as follows:

There is no zakat for sheep between the amounts of O – 39.

For sheep between the amounts of 40 – 120, the zakat is 1 sheep,

For sheep between the amounts of 121-200, the zakat is 2 sheep,

For sheep between the amounts of 201-300, the zakat is 3 sheep,

After three hundred sheep, one sheep is given as zakat in every hundred sheep.

When zakat is given on sheep and goat, there is no requirement for zakat animal to be male or female. The goat chosen and given as zakat must be older than two years old, while the sheep given as zakat must be older than a year old. However, if a six-month old lamb is imposing and looks like a year old sheep, then it can be given as zakat.

This is because sheep and goat are considered the same kind, they are added to each other to complete the amount of nisab. For example, if one owns twenty-five sheep and fifteen goats, he must give one sheep as zakat because he has forty animals in total. It is more appropriate to give zakat in the kind of the majority of animals in the herd.

If the jointly owned animals reaches the amount of nisab and one year passes over them, they become subject to zakat. Allah’s Messenger (pbuh) said in one of his hadiths, “Neither the property of different people may be taken together nor the joint property may be split for fear of (paying more, or receiving less) Zakat.”[11]

If the animals owned by partners are combined, they should not be separated in order to eliminate or reduce the obligation of the payment of zakat. For example, two partners who own forty sheep throughout a year must not end their partnership at the end of the year in order to save themselves from the payment of zakat. Therefore, they will be sinners. In like manner, if two men, each one of whom owns forty sheep, become partners and combine their sheep to give only one sheep as zakat (because the total becomes 80 sheep) instead of each one of them giving one sheep, they will also become sinners.[12]

In order to calculate zakat jointly on the mutually owned animals, the animals should be fed together. If two neighbors bring their animals together and combine them, their zakat is calculated together as if they are owned by one person provided that the animals are cared by the same shepherd, grazed in the same pasture, and kept and milked in the same barn.

[1] Abu Ubayd, Kitab al-Amwal, p. 413[2] Because of its common usage in the contemporary world, the nisab for gold is used as criterion for the calculation of nisab amount of other currencies. However, there are some scholars who argue that the nisab for silver should be used as criterion in order to protect the rights of the poor.[3] Al-Baqara, 2: 267.[4] Al-Shirbini, Mughn al-Muhtaj, 2101[5] Al-Bukhari, Zakat, 67[6] Al-An’am, 6: 141.[7] Al-Zaylai, Nasb al-Raya, 2/384[8] Al-Zuhayli, al-Fiqh al-Islami, 3/1883[9] Al-Bukhari, Zakat, 55; Muslim, Zakat, 8; Abu Dawud, Zakat 5, 12; al-Tirmidhi, Zakat 14[10] Tecrid-i Sarih Tercemesi, 5/32[11] Al-Bukhari, Zakat, 33, 34, 35; Abu Dawud, Zakat, 4; al-Nasai, Zakat, 5[12] Zuhayli, al-Fiqh al-Islami, 3/1930

Source: Fiqh1 (According To The Shafi’i School Of Islamic Law), Erkam Publications

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