Alhassanain(p) Network for Heritage and Islamic Thought

Dialogue on Zakat

Zakat is one of the five pillars on which Islam is built. It is among the obligations of faith. Because of this it has been described by a Prophetic hadith: Prayer may not be accepted from the worshipper who withholds zakat.

When the verse,

“Take alms out of their property, you would cleanse and purify them thereby..”, (9/104),

the Prophet (s.a.w.) ordered his messengers to go out and break the news, “Allah, the Most High, has decreed that you pay zakat as He has decreed the daily prayers”. When it was the first anniversary of the injunction, he sent his messengers to make it known to the people, “Take the portion of zakat out of your property, that your prayer may be accepted”. He, then, sent out the taxmen to collect zakat from those who were required by Islamic law to pay it.

My father continued relating to me evidence from tradition on the importance of paying zakat. He said: Once the Prophet (s.a.w.) was in the mosque, he started calling some five co-worshippers by their names and ordered them to leave, adding: do not say prayer here so long as you withhold zakat money.

Imam Ja’far as-Sadiq (a.s.) was quoted as saying, “On the Day of Judgement, Allah, the Exalted, shall resurrect some of the dead from their graves, with their hands glued to their necks so much so that they cannot move them an iota. Shepherded by the angels, they will be taunted: These were the ones who withheld a meagre portion of abundant bounty (they were favoured with). These are the ones who withheld the right of God to be taken from their property.

Moreover, during my recitation of the Holy Qur’an, I frequently come across many a verse where zakat has been equated with prayer. This indicates the lofty place of zakat in Islamic legislation.

When I asked my father about the rationale behind stipulating payment of zakat, he answered me with a hadith from Imam as-Sadiq (a.s.), “Zakat has been imposed as a measure of trying the rich and a source of subsidy for the poor. And if people paid zakat due on their property, there won’t be any needy or poor Muslims. What you see of want, poverty, and hunger are the result of the rich not fulfilling their obligations. It is worthy of God, the Glorified, to hold back His mercy from those who withheld His right in His property (that was entrusted to them).

* Is zakat payable on all kinds of property?

- No, zakat is payable on the following, each according to certain criteria.

1. Silver and gold coins.

2. Crops, such as wheat, barley, dates, and raisins.

3. Camel, cattle, buffaloes, sheep and goats.

4. [Revenue from trade].

* What are the conditions that should be present in silver and gold coins to render them taxable?

- Several conditions:

The quantity of gold should not be less than mithqal sairafi (of coins and bullion - a unit of weight, equivalent to 4.608 gm). The percentage due is 2.5% For every three mithqals increase thereafter, the same percentage must be paid.

As for silver, the quantity should not be less than one hundred and five mithqals; the percentage due is 2.5%. For every twenty one mithqals thereafter, the same percentage should be paid.

* If the quantities of silver and gold do not reach those limits?

- No zakat is payable.

2. Eleven months should pass, leading to the twelfth month, while it is still in one’s ownership.

3. Silver and gold should be of the minted type used as a means of monetary exchange.

* What about jewellery made of gold and silver?

- They are exempt from zakat.

4. The ability of the owner of these metals to use them freely all year round. Thus, no zakat is due on property over which you have no control, such as lost property, for a generally accepted length of time.

5. Adulthood and soundness in mind of the owner, for no zakat shall be due on such coins owned by a minor or a mentally handicapped person.

The second category of zakat is that which is due on such crops as wheat, barley, dates, and raisins. The minimum weight taxable of any of these crops, when it is dry, shall be three hundred sa’ (a cubic measure equivalent to approximately 847 kgs). The amount of zakat deductible is according to the following criteria:

a. If the land cultivated with these crops is irrigated by either rain or river water, that does not call for great effort, the zakat shall be 10%.

b. If it is irrigated by hand, a pump, or the like, zakat payable shall be 5%.

c. If the source of irrigation varies, i.e. using both the ways mentioned in (a) and (b), payment of zakat shall be at the rate of 7.5%, unless either way of irrigation was used sparingly. In this case, the rate shall be charged in line with the predominant way applied.

* Are there any other conditions?

- Yes, the crop should be owned by the mukallaf at the time of zakat being due. Should he assume ownership thereof at a later date, no zakat shall be due.

* When does zakat become due on the four types crop?

- It becomes due on any of the four crops when it is generally accepted that they cannot be mistaken for any other crop than wheat, barley, dates, and raisins.

The third category of property that is liable for zakat is that comprising sheep, goats, cattle, camels, and buffaloes. The criteria for payment of zakat on these types of livestock are the following:

1. When their respective numbers reach certain figures.

Insofar as camels are concerned, a minimum number of five camels would warrant one sheep of zakat. For every five extra camels thereafter, and up to and including twenty five, the rate is one sheep for every five camels, i.e. if you have twenty five camels, five sheep is the number that should be given in zakat. However, if you own twenty six camels, the zakat due shall be one two-year-old she-camel; thirty six would warrant one three-year-old she-camel.

There are, though, other bench mark numbers; this is not the time to go into detail about them.

As for sheep, the minimum, on which zakat is due, is forty. One sheep should be given away in zakat for that number of sheep. Two sheep for a hundred and twenty one, three sheep for two hundred and one, four for three hundred and one; any number of sheep exceeding four hundred the rate is one sheep for every one hundred of them, without a ceiling.

In respect of cattle and buffaloes, the minimum that is taxable is thirty of either. Zakat payable on that number is a calf, that has just entered the second year of its life. If the number was forty, zakat due shall be one two-year-old she-cow/buffalo.

However, zakat shall not be due on any minimum number stipulated for camel, cattle, and sheep. That is, if the number exceeds the minimum, there shall be no zakat until the number has reached the new minimum.

2. Such livestock must be of the kind that graze in the fields. Should it need to be fed by supplements, even during part of the year, there shall be no zakat. [It is not of a consequence if the animals are used for work, such as tilling the fields or carrying water and the like. Zakat must be taken out, even if they were used a good part of the year].

3. The owner, or his guardian, should have the right of disposal over his livestock throughout the year. If any was stolen, for a considerable period of time then returned, no zakat shall be due.

4. A minimum of eleven months, leading to the twelfth month, should have elapsed under the ownership of the same person, before any zakat becomes due.

The fourth category [of property where zakat becomes payable is revenue from trading]. It is the capital used, for buying and selling, by a person with the aim of making a profit.

The rate of zakat deductible is 2.5% when all the following conditions are met:

1. The owner should have attained adulthood and be sound in mind.

2. The property should attain the minimum outlined in silver and gold monetary means of exchange.

3. The lapse of one (tax) year on it, in kind, from the date it was intended for trading and making profit.

4. The intention to make profit should remain constant during the entire year. In other words, if you appropriate some of the money you set aside for the purpose of trading, or spend part of it on buying provisions during that year, no zakat shall be due.

5. The right of having free hand in the capital throughout the entire year.

6. The aim behind the working capital should be economic activity, i.e. not tying it up.

* Should I take zakat out of my property, to whom shall I give it?

- It is paid to those who are eligible to receive it. They fall in eight categories; you find them in the words of The Sublime,

“Alms are only for the poor, the needy, the officials (appointed) over them, those whose hearts are made to incline (to truth), the (ransoming of ) captives, those in debt, in the way of Allah, and the wayfarer; an ordinance from Allah; and Allah is Knowing, Wise). (9/60).

* What is the difference between the needy and the poor?

- Both of them share, to a large extent, the same description, i.e. they are those who do not have the means, for a year, to support themselves and members of their family, and do not have work whereby they can earn a living. The poor, however, are worse off.

* Who are the officials appointed over them?

- It is the workforce charged, by the Prophet (s.a.w.), the Imam (a.s.), or the Marji’ or his deputy, to collect zakat, and oversee its distribution to those entitled to receive it.

* What about those whose hearts are made to incline to truth?

- Those are either Muslims, whose faith shall take root through receiving such dues, or the unbelievers, who are encouraged to embrace Islam - or to support Muslims in defending themselves.

It is to be noted, however, that the owner has no right of disposing with zakat money to this category. It is the prerogative of the Imam (a.s.), or his deputy.

* And the ransoming of captives?

- These are the slaves who are bought in order to be set free.

* What sort of debt could be settled with zakat money?

- It is the debt of those people who cannot pay back what they borrowed in a lawful way.

* Is there a particular avenue in the way of Allah, some of zakat money should be spent?

- It is spending, in a general sense, in every avenue that is commensurate with the public interest, such as building mosques, bridges, etc. [in disposing with this portion, the permission of the Marji’ should be obtained].

* And the wayfarer?

- It is the stranded traveller, who could have run out of money, whose credit facility may no longer be available, or who may feel embarrassed to borrow money in order to make the return journey home. [Also it is not possible for such a person to sell, or lease, some of their possessions in their home country to finance their return journey]. They can be allotted this part of zakat, provided that their travel was not for committing any sinful act.

Those, who fall within any of these categories do not qualify for receiving any money thereof, unless they are believers [they should not be among those who abandon prayers, drink intoxicants, or who openly commit that which is forbidden]. They should not be among those who dispose of the money in sinful acts, [to ensure that paying them is not a source of temptation, encouraging them to go the wrong way, even though they may not dispose of zakat money in disgraceful actions].

Those, who are among the taxpayer’s dependants, such as his wife, do not qualify for zakat money. Those of a Hashimite pedigree are not eligible to receive zakat money from non-Hashimites; they can receive it from their fellow Hashimites only.

Dialogue on Khums

Clutching a copy of the Holy Qur’an, my father went into the room where we usually conduct these dialogues. His expression suggested reverence and serenity. No sooner had he sat, he bent and kissed The Book, lifting it with both his hands and giving it to me.

Receiving it with both hands, I was overwhelmed by a sense of dignity and sublimity. My father then asked me to open The Qur’an and recite some verses, starting with part ten.

* I opened The Book and recited,

“And know that whatever thing you gain, a fifth of it is for Allah, the Messenger, the near of kin, the orphans, the needy, and the wayfarer, if you believe in Allah and in that which We revealed to Our servant, on the day of distinction, the day on which the two parties met; and Allah has power over all things”. (8/41).

My father interrupted me, saying:

- Could you repeat what you have just recited?

* I repeated part of the verse.

- Thus far is sufficient.

I could hear him murmur, as though he was talking to himself, “And know that whatever thing you gain, a fifth of it is for Allah…”. He raised his head and addressed me. Do you know that khums is wajib?

* Confidently, I said, yes, yes I know.

He stood up and gave me a volume of a book entitled, “Al-Wasa’il”, The Means. The author is Mohammad bin al-Hassan al-Hur al-Aamili. He asked me to open the book and read from the chapter of “al-Khums”.

* I read for him a number of hadiths related from the Prophet (s.a.w.), Imams Ali, al-Baqir, as-Sadiq, and al-Kadhim (a.s.) on the subject of Khums.

Among the traditions, I read was one related on the authority of Imran bin Mousa. He was quoted as saying, “In the audience of Imam Mousa bin Ja’far - al-Kadhim (a.s.), I recited the verse of Khums. He retorted, “Whatever was Allah’s is His Apostle’s; and whatever was the Apostle’s is ours”. He, the Imam, added, “By Allah Almighty! if Allah has made the believers’ sustenance easily available with, say, five Dirhams, they should set aside one Dirham, that is Allah’s share, and take ownership of four pure (halal) ones”.

I also read a hadith transmitted on the authority of Mohammad bin al-Hassan al-Ash’ari, “Some of our companions wrote to Abu Ja’far ath-Thani, al-Jawad (a.s.): Could you tell us about khums? Is it deductible from all types of earnings, be they little or plenty, and how? He wrote in his own handwriting: Khums is (deductible from income) after allowing for one’s provisions”.

* During the Dialogue on Prayer, you said to me: Do not say your prayer, wearing clothes whose Khums tax was not paid. You reiterated this when we were discussing matters of Hajj. You said: Cleanse your property by setting aside, where applicable, khums and zakat due on it, before you embark on your journey for pilgrimage. Do I have to pay khums tax on all my property?

- Khums is payable on the following:

1. Whatever Muslims take in war booty, movable and immovable property, from the unbelievers they lawfully engage in war.

2. What is owned, of metals, by way of mining, such as gold, silver, copper, iron, sulphur, etc. Also, crude oil and coal, after deducting production and processing cost, provided that the quantity extracted and ready for marketing is not less than the equivalent value of fifteen mithqal sairafi of gold coins or more.

3. Treasures, provided that their value is not less than the equivalent of fifteen mithqal sairafi of gold and one hundred and five mithqals of silver, excluding excavation costs.

4. What has been extracted from the sea or big rivers by way of diving, such as pearls and corals, provided that the value thereby is not less than the equivalent of one gold Dinar (equivalent to 4.25 gm).

5. Some types of licit money mixed with illicit money.

6. Annual profits acquired through trade, industry, agriculture, presents, any other means of income, including wages and salaries and…..

I interjected, “Does this mean that profits made by bussinessmen should be liable for khums tax?”

- Not only businessmen are required to pay khums on their returns, rather everyone who is making a profit of a kind or earning income, including you and me.

* How does a businessman go about calculating khums due on his profits?

- He should take stock of his cash and merchandise, a year after setting up in business; he should, though, exclude the following:

a. His capital.

b. Any costs incurred in the process of conducting the business, i.e. transport, electricity, telephone, rent, storage, taxes and the like.

c. All personal outgoings, i.e. expenditure on food, drink, clothes, house, furniture, transport, medical treatment, and other similar expenses, including paying debt, buying presents, travelling, that are considered within one’s normal lifestyle, but not bordering on the lavish side. Having allowed for all such expenses, he should set aside 20% on the net profit and pay it in khums.

* Could you give me an example?

- Suppose at the end of the year, you own ten thousand Dinars in cash and twenty thousand Dinars in merchandise, making a total of 30,000 Dinars. And suppose you started the year with a capital of 15,000 Dinars. Expenses arising from trading totalled 1,000 Dinars and personal and family expenses totalled 4,000 Dinars. Thus, your net profit, after deducting these expenses, shall be 10,000 Dinars, i.e.

30,000 - 20,000 = 10,000 on which khums should be paid thus:

10,000 @ 20% = 2,000 Dinars

* On which date should I start calculating profits, so that I can pay tax after the lapse of one year?

- From the date you make the profit till the lapse of one full year, provided that you did not use any of the profit for food, drink, and the like. If you make your living of a profession or a salary, you fix your tax year from the date you started earning income.

* If I bought clothes for me, but did not wear them for one year, do I have to pay khums on them?

- Yes, you have to pay khums on the price of the clothes. So do the owners of any household effects or provisions that were not used during the whole year.

* Do I take it that whatever is left of personal or domestic goods and provisions, i.e not used or consumed, etc. should be liable for khums tax?

- Yes, at the appointed date of your tax year, you should carry out an inventory control of all excess goods and provisions, and set aside its fifth, either in kind or the value thereof.

* When I carry out the evaluation of such items, do I have to take into account the price when they were bought or the current market value?

- Rather, their current market value.

* Suppose I did not pay khums on a particular item on which khums tax had to be paid?

- It is not permissible to have the right of disposal over such item, unless you have paid khums on it. It is permissible, though, with the permission of the Marji’, should he see that an interest is served in so doing.

* What shall be the responsibility of the heirs of the deceased person who had a khums liability and who did not leave a will saying so?

- They should take the amount of khums due out of his estate, as a matter of priority over other shares. However, the estate of the rebellious, who withheld paying khums, could revert to the believing among his heirs; and it is not incumbent on the inheritor to pay the khums liability on behalf of the legator.

This is the case too with everything the devout Muslim assumes ownership of from sources, that do not pay khums, by way of business or for free. Thus, the recipient has the right of disposal over such property. The same goes for the property, of a person who does not pay khums, if he has been given free hand, but without ownership; the benefit would be the recipient’s and the sin shall be on the person who withheld the khums, if he was at fault.

My father paused for a while. I took the opportunity to ask him a question.

* What shall be the position of a businessman, a landlord, an industrialist, an employee, a student, or others who did not pay attention to paying khums on their gains years on end, then it dawned on them to pay the prescribed religious tax?

- Such people should pay khums on all these gains, except for their yearly provisions, but on everything in excess of their need.

* Could you give me an example?

- Suppose you bought a second house, i.e. other than the one you live in, you should pay khums on it. Khums should also be paid on furniture, and other goods, bought, but not used, thus becoming surplus to one’s requirement.

* What about items that fall within one’s yearly provision, such as the house, furniture and the like?

- If such items were bought with the gains of that year, i.e. when he bought the house or furniture and used them, no khums shall become due. This also goes for other goods and provisions of similar nature.

* What if the house was bought, for one’s own use, with profits that were accumulated from previous years plus the profits of the year in which he bought the house, as is the case of many people nowadays?

- They should consult the Marji’, or his deputy, to reach a settlement with regard to the portion of previous years’ profits and that of the year they bought the house. Should the amount of profits made during previous years be determined, khums must immediately be taken out of such profits.

* If the person concerned was in no position to pay the khums due immediately?

- The Marji’, or his deputy, may allow him to pay it by instalments, after he considers it as a debt to be settled by him without default.

* I am now living with you in the same house. Do I have to pay khums, or should the khums payments you make suffice?

- Yes, you must pay khums on profits accrued, but not used, during the year, because you did not need to.

* Being a student, suppose, during the summer recess, I worked part time and earned some money and spent it to buy clothes or the like. Am I required to pay tax on it?

- If you spent it on things of personal use, no khums shall be due. If, however, you saved it or part thereof till one year has passed, khums becomes due on the savings.

* Someone bought a shop with its contents for a particular premium; he then set aside the khums due on the purchase price after the lapse of one year. Should he cater for khums on the amount of appreciation of both the premium and the goods every year?

- No, it shall be incumbent on him to pay khums on the extra profit, should he sell the shop and not spend the returns on buying provisions during the year.

* Do cutlery and chinaware, used as ornamental objects, warrant exemption from khums?

- If it is widely accepted among one’s peers as such, no khums tax shall be due as they are considered among other household effects provided during the year.

* Suppose I had a certain amount of money that is net of khums. I chose to convert it into another currency. The value of the latter became two-fold, compared to the original currency. I further chose to save it beyond the first year. Do I have to pay khums on it?

- You are not required to pay khums on the excess amount of appreciation, so long as your intention was to save the money.

* Some foodstuffs are subsidised by the state, i.e. their price is cheaper than comparative merchandise sold privately in the market. If the owner of these subsidised items did not consume some of them, and the first anniversary of their purchase came and went, should the calculation of the khums due on such goods be made according to the subsidised price or market price?

- Khums should be calculated in line with the market price at the time of paying khums.

* A plot of land was lawfully bought, and made use of, by a person. However, it is registered with the land registry office in another person’s name. Thus, the latter has the right of disposal over the land. Should the original buyer pay the khums due on it now, or postpone payment until it is officially registered in his name?

- He should pay khums on it now, should the case satisfy the aforesaid criteria of khums.

* What about the pension received by retired people? Do they have to set khums aside on receipt thereof or delay payment of khums until the new tax year?

- Khums should be paid on the surplus amount in the new tax year.

* Should I set khums aside, to whom shall I give it?

- Khums is two halves One half is the right of the Awaited Imam (May Allah hasten his reappearance), to be spent in the avenues that please him, with the permission of [the most erudite Marji’, who is fully aware of of avenues of public interest], or it could be paid to him directly. The other half should be spent on the poor and the wayfarers among practising Hashimites; and committed Muslims among the orphans of the believers.

The Hashimites here mean the descendants, from the father side, of Hashim, the grandfather of the Noble Prophet Mohammad (s.a.w.).

It is to be noted, however, that [it is not permissible to give khums money to one’s own dependants, such as father, mother, wife, and offspring]; it is not permissible, too, to give it to him who shall spend it in haraam avenues; [what is of consequence is that giving such money away should not lead to aiding the recipient to commit a sin, although he might not spend it in a haraam act. It is also not permissible to give khums money to those who forsake prayer, consume intoxicants, and flagrantly flout religious injunctions].