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Zakat

What is 'Zakat'

A term used in Islamic finance to refer to the obligation that an individual has to donate a certain proportion of wealth each year to charitable causes. Zakat is a mandatory process for Muslims in order to physically and spiritually purify their yearly earnings that are over and above what is required to provide the essential needs of a person or family.

Explaining 'Zakat'

There are comprehensive descriptions in religious texts describing minimum amounts of zakat with regards to farm produce, cattle, business activities, paper currency and precious metals such as gold and silver.

The most common level of zakat on wealth from cash, equities and gold is 2.5% of the total value.


Further Reading


A framework to analyse the efficiency and governance of zakat institutions
www.emerald.com [PDF]
… of New Orleans Corresponding Author M. Kabir Hassan Department of Economics and Finance … AN INTEGRATED POVERTY ALLEVIATION MODEL COMBINING ZAKAT, AWQAF AND MICRO- FINANCE M … 22 b) Economic Viability of MFIs: One of the major financial challenges …

Zakat as a Measure of Social Justice in Islamic Finance: An Accountant's OverviewZakat as a Measure of Social Justice in Islamic Finance: An Accountant's Overview
103.8.145.246 [PDF]
… of New Orleans Corresponding Author M. Kabir Hassan Department of Economics and Finance … AN INTEGRATED POVERTY ALLEVIATION MODEL COMBINING ZAKAT, AWQAF AND MICRO- FINANCE M … 22 b) Economic Viability of MFIs: One of the major financial challenges …

The influence of zakat on economic growth and welfare society in IndonesiaThe influence of zakat on economic growth and welfare society in Indonesia
mpra.ub.uni-muenchen.de [PDF]
… of New Orleans Corresponding Author M. Kabir Hassan Department of Economics and Finance … AN INTEGRATED POVERTY ALLEVIATION MODEL COMBINING ZAKAT, AWQAF AND MICRO- FINANCE M … 22 b) Economic Viability of MFIs: One of the major financial challenges …

Zakat, taxes, and public finance in IslamZakat, taxes, and public finance in Islam
books.google.com [PDF]
… of New Orleans Corresponding Author M. Kabir Hassan Department of Economics and Finance … AN INTEGRATED POVERTY ALLEVIATION MODEL COMBINING ZAKAT, AWQAF AND MICRO- FINANCE M … 22 b) Economic Viability of MFIs: One of the major financial challenges …



Q&A About Zakat


What does Zakat refer to?

Zakat refers to the obligation that an individual has to donate a certain proportion of wealth each year.

What is Zakat?

Zakat is a mandatory process for Muslims in order to physically and spiritually purify their yearly earnings that are over and above what is required to provide the essential needs of a person or family.

Is there any other way you can give your money away?

Yes, there are many ways besides paying it directly through charity organizations or mosques. You can also use it as an investment by donating money into Islamic financial institutions like banks or funds that invest in businesses that follow Islamic principles which will then redistribute profits back into society through charitable causes. This type of donation is called "sadaqah" which means voluntary giving without expecting anything in return except for rewards from God (Allah).

How much should you give in zakat?

There are comprehensive descriptions in religious texts describing minimum amounts of zakat with regards to farm produce, cattle, business activities, paper currency and precious metals such as gold and silver. The most common level of zakat on wealth from cash, equities and gold is 2.5% of the total value.

Who must pay zakat?

Everyone who owns more than what they need must pay zakat.

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