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Dr. Mustafa Omar Mohammed Shari’ah Principles on Zakat Calculation: Nisab, Rates & Issues.

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Presentation on theme: "Dr. Mustafa Omar Mohammed Shari’ah Principles on Zakat Calculation: Nisab, Rates & Issues."— Presentation transcript:

1 Dr. Mustafa Omar Mohammed Shari’ah Principles on Zakat Calculation: Nisab, Rates & Issues

2 2 Zakat on livestock Zakat on Gold and Silver Zakat on Business Inventory 1 Zakatable Assets 3 Zakat on Agriculture Zakat on labor 4 Issues Introduction Outline

3 Introduction  Zakat is multi-dimensional: religious, social, economic, spiritual. Hence the issue of ijtihad  In embodies joint rights [Allah, the payer and the beneficiaries]  Inculcates giving behavior& and other positive values

4 1212 Undivided and absolute right of ownership [Implications: assets without specific owner, assets in public trust-mosques, waqf, unlawful wealth, Zakat on debts, grants and employee savings, etc 3434 Growing assets Reaching Nisab Al-Hawl In excess of needs Freedom from debt Zakatable Assets

5 Zakat on Livestock  The prophet s.a.w provided nisab and rates for sheep, camel and cows Khalifah Umar r.a. added horse to the list, he collected 1 dinar per horse

6 Zakat calculation on Sheep, camel and cow  Must meet the nisab  The passage of lunar calendar year  Should be pastured naturally [cost- free]  Should not be animals used for work

7 Zakat calculation on Sheep, camel and cow Sheep NisabRate 1-39No Zakat sheep sheep sheep Above 300 Additional 100, 1 sheep Camel 5-91 sheep sheep sheep sheep yrs 1 FC ---- Above120Additional 50, 3-4 yrs FC Additional 40, 2-3 yrs FC Zakatability of baby animals?

8 Zakat calculation on Sheep, camel and cow Cow NisabRate 1-29No Zakat 30- Above 120Additional 30, 1 yr cow Additional 40, 1cow Ratios: 5 camels: 40 sheep: 30 cows

9 Zakat calculation on Gold and Silver Gold and Silver NisabRate 85 grams of gold2.5 % 595 grams of silver2.5 % Exemptions include: ladies jewelries for personal use not as al-Rahn Men’s uses for medical reasons, e.g., teeth

10 Zakat calculation on Business Inventories Business Inventories NisabRate 85 grams of gold2.5 % 595 grams of silver2.5 % Business Inventories include: Final goods and services Financial assets [Securities, shares, unit trusts]

11 Zakat calculation on Business Inventories Approaches Net Current AssetNet Growing Capital Current Assets less Current Liabilities Adjustment by adding short term debts and reducing long term debts Zakat payable= 2.5% x [Muslim share ownership] Zakat on shares= 2.5% x [Market value per share x quantity of shares] Zakat on Sukuk= 2.5% x [Market value per Sukuk x quantity of Sukuk]

12 Nisab of gold and silver Rate at 2.5% on annual income Deducted at source Zakat on Labor

13 Z AKAT ON L ABOR NoItemsAmount (RM) 1Annual gross income 2Deductions 3Personal needs8000 4Expenditure per wife3000 5Expenditure per child1000 6Expenditure to Parents 7Contributions to EPF (11% annually) 8Contributions to charity organizations 9Total Deductions 10Total zakat payable

14 ISSUES Lack of awareness Lack of effective management Lack of trust Lack of transparency Variations of fiqh opinions

15 Thank You Wa Allah A’Lam


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