* If your company as a whole pays zakat then you need not calculate personal zakat. If not then you have to see your personal share in the firm and pay zakat on that percentage.
** Again the Mixed Irrigation is a logical conclusion accepted by most Ulema of all Madhabs.
*** You need to deduct your direct Payables or Liabilities which have not been deducted earlier – Usage of the loan should have been on Zakatable Wealth only. HOME & CAR Loans are not to be deducted
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Notes and Instructions
Zakat on Pure Gold and Gold Jewellery
Zakat should be calculated at 2.5% of the market value as on the date of valuation (In our case we consider 1st of Ramadhan). Most Ulema favour the Market Value prevailing as on the date of Calculation and not the purchase price. This also includes Yellow and White Gold.
Zakat on Precious and Semi-Precious Stones
There is considerable contention on whether these are to be considered for valuation. If you use the general rule: If they have a value, then they calculate towards your wealth, and it is on the wealth that Zakat is mandatory. However please consult with Ulema, before acting on this section. Most Ulema contend that a diamond is a piece of carbon and its value varies, unlike that of gold or silver.
Zakat on Silver
Zakat is to be paid on Silver in Pure form or Jewellery, Utensils, Decorative items and all household items including crockery, cutlery made of silver at 2.5% of the prevailing market rates.
Zakat on Cash and Bank Balances
Zakat should be paid at 2.5% on all cash balance and bank balances in your savings, current or FD accounts. The amount technically should be in the bank for one year. Usually, it happens that the balance keeps on changing as per personal requirements.
You may make your best judgement and the best way is to pay on remaining amount on the day of calculation
Zakat on Loans Given, Funds, etc
Zakat is payable by you on loans you have given to your friends and relatives. If its short term and given as
Zakat is payable on all Govt Bonds, Public Sector Bond, paid-up Insurance premiums, your paid-up portion of Provident Funds, Govt Bills receivables, etc.
Zakat on Landed Property
Zakat is not payable on personal residential House even if you have more than one and meant for residential purpose only. Also, Zakat is not applicable on the value of Property given on rent irrespective of how many. However, Zakat is payable on the rental income itself after deducting the maintenance and other expenses.
If your intention of holding properties is to sell at a future date for a profit or as an investment, or you do this as a business, then Zakat is payable on the Market Value of the property. Also, if your intention of holding properties changes in the current year, i.e. from self use to business then you need to pay Zakat on that Property Value.
Zakat on Business
This is for Business Persons only. No matter what business you are into, you’ve got to pay Zakat on all STOCK-IN-TRADE. The stock must be valued at its Landed Cost Price. If you have
Deduct the Amounts due to your suppliers and deduct the loans on stock on the date of calculation. Dead Stock should be calculated on scrap value or its saleable value. Damaged stock should also be valued at its scrap value.
Be honest in the calculations, as ZAKAT is an INSURANCE on your STOCK directly from ALLAH and who better an insurer than Him.
There is no Zakat on Factory Buildings or any kind of machinery, but there is zakat on products produced in the factory (i.e. finished goods value). Please refer to competent Ulema or a scholar who can shed more light on your specific issues.
Zakat on Partnership Firms
Zakat can be paid EITHER by the firm OR separately by the owners. If the firm is not paying, and the partner wants to calculate his share, he should take the amount standing to his capital and loan account as per the last balance sheet. Add his estimated share of profit till the date zakat is calculated.
This can only be estimated as it is difficult to calculate the exact profit or loss between an accounting year.
Zakat on Agricultural Product
Zakat is payable on all Agricultural produce including fruits, commercially grown flowers, vegetables and all types of grains at the harvest time itself. The passing of One year does not apply for agricultural produce. If there are two or more crops on the same land per year, then Zakat has to be paid as many times on the crop, irrespective of the time.
The Consensus formula for Zakat calculation on Agriculture is as follows:
On crops dependent purely on rain water it will be 10% of produce, On crops not irrigated through rain water but use Canal Water, Tank Water, Borewell and Open wells, the Zakat is 5% of the produce. For Crops dependent partly on Rain Water and partly on other water, the Zakat applicable would be 7.5% of produce.
Zakat on Animals
On all grazing animals like goats, sheep, camel, cows, broiler chickens, the consensus Zakat payable is one animal/bird for every 40 animals owned. However, you may wish to give cash in lieu of the animal/bird itself.
Please consult your local Scholar or Maulvi or Imaam who can guide you in the right direction, or refer to books of Fiqh if you would like to have first-hand confirmation of the situation.
If you have any pending tax payable to the govt, as of the date of Zakat Calculation, then the same may be deducted before arriving at the net worth. If you have taken any loans from any person or institution, and if you have not already deducted the same from any of the above sections, then you can deduct your Payables over here. Please be truthful, as Zakat is a sure way of protecting one’s wealth if Zakat has been paid on it regularly and fully.
LOANS taken only for Zakatable-Wealth should be deducted. Cars, Houses, etc are not Zakatable wealth. So any loan/mortgage taken for these purposes are not to be made part of deductions.
FOOTNOTE: Please note that RIBA in any form is Haram and strictly prohibited. So please stay away from taking Loans on Interests AND Collection of Interests from any body or institution or other forms of RIBA’.
This zakat calculator is based on the calculator by brother Arif Jameel. It is also available online at http://www.zakatonomics.com/
“You are free to distribute this Calculator, by email, by print or by posts over the Internet. My intention in creating this was to make the task of Zakat as simple and easy as the act of Zakat itself.
Jamaica Foundation for Islamic Charity
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