Rulings on Zakat al-Fitr and Zakat on Trade

Know, O servants of Allah, that zakat is one of the most important pillars of Islam. Allah, the Almighty, says: {And establish prayer and give zakat} and it is mentioned in the hadith of the Messenger of Allah (peace be upon him), where he said: “Islam is built on five [pillars]: the testimony that there is no god but Allah and that Muhammad is the Messenger of Allah, establishing prayer, and giving zakat.”

Whoever withholds zakat, despite believing in its obligation, has committed a major sin, as the Prophet (peace be upon him) said: “Allah has cursed the one who consumes usury, the one who facilitates it, and the one who withholds zakat.” As for the one who denies its obligation, he has left the fold of Islam.

Zakat is obligatory on camels, cattle, sheep, dates, raisins, crops such as wheat and barley, and on gold and silver, as well as the minerals and buried treasures found. In the context of zakat, “minerals” refer to gold and silver that are found in the location where Allah created them, meaning they are not buried. Buried treasures are referred to as rikaz and must be given zakat immediately upon acquisition, without waiting for a year to pass. Rikaz refers to treasures buried in the pre-Islamic era before the advent of Prophet Muhammad (peace be upon him). If someone finds such a treasure in land that he revives (i.e., land that was not owned by anyone), he is required to pay zakat on it as soon as it reaches the minimum threshold, which is the amount at which zakat becomes due, either in gold or silver.

This treasure can be identified as pre-Islamic if it contains the name of a ruler from that period.

Trade Wealth and Zakat on Business: As for the zakat on trade, its minimum threshold (nisab) is the value of the money used to purchase the goods, and the two types of currency used for this purpose are gold and silver. Only the final value at the end of the year is considered for zakat. A quarter of a tenth (2.5%) of the value must be paid.

The term “trade” refers to the buying and selling of goods with the intent of making a profit, such as buying, selling, and repeatedly engaging in these transactions. The value for zakat on trade is determined by the currency used for purchasing the goods—if bought with gold, the goods are valued according to gold; if bought with silver, they are valued according to silver; and if bought with another currency, the goods are valued by the dominant currency in that region, whether gold or silver. According to Imam Abu Hanifa, it should be valued by the currency that is more beneficial to the poor.

If someone starts trading in the last days of Rajab, for example, he should value his stock at the end of Rajab in the following year. If the value reaches the nisab, zakat must be paid. The evaluation of the stock at the time of zakat should be based on the market price at that time, not the price at which the merchant originally bought the goods. One should not wait until Ramadan to pay zakat, as some people do. There is a specific time for zakat to be obligatory, and another time when it may be paid early. The obligatory time for zakat is the completion of one lunar year, while it is allowed to pay zakat before this time, as long as the owner remains eligible to pay and the wealth remains until the end of the year.

Zakat al-Fitr: As for Zakat al-Fitr, Allah has made it obligatory on every Muslim and on those under his responsibility, provided they are Muslim. The time for Zakat al-Fitr is during Ramadan. It becomes obligatory with the sighting of part of Ramadan and part of Shawwal. The amount for Zakat al-Fitr is one sa’ (a traditional Islamic measure) of the predominant food of the country, provided the person has wealth above their debt, clothing, housing, and sustenance for themselves and those they are responsible for on the day and night of Eid.

Intention is required for all types of zakat, including Zakat al-Fitr, with the intention being, for example, to say in the heart: “This is my zakat” or “This is the zakat for my body.” It must be distributed to those who are deserving of zakat, including the poor, the needy, those employed to collect it, those whose hearts are reconciled (new Muslims), freeing slaves, those in debt, in the cause of Allah, and travelers.

The poor are those who have less than half of what they need for their daily living.

The needy are those who have half of what they need but do not have enough for their full needs.

Those employed to collect zakat are those appointed by the caliph or ruler to collect zakat from the wealthy, and they do not receive a salary from the state treasury. If they are paid a salary from the state treasury, they are not entitled to zakat.

Those whose hearts are reconciled refers to those with weak faith who have just embraced Islam and still feel a sense of estrangement from the Muslim community.

Freed slaves are those who have agreed with their masters to pay a certain amount of money in order to free themselves.

Those in debt are those who are overwhelmed by debt and cannot repay it; they are eligible for zakat to pay off their debts.

In the cause of Allah refers to those who are engaged in voluntary jihad, particularly those who do not receive a share from the public treasury, and they are given zakat to support them in their efforts, even if they are wealthy.

It should be noted that “In the cause of Allah” does not refer to every charitable act, such as building mosques, schools, hospitals, etc. Ibn Hazm has reported the consensus (ijma’) of scholars that zakat cannot be used for building mosques. This consensus is based on the opinions of the scholars.

The traveler (ibn al-sabil) is one who is on a journey and does not have sufficient funds to reach their destination.

As zakat can only be given to the eight categories mentioned in the Qur’an, it is also prohibited to give zakat to any other individual or to a person who is not trustworthy. The zakat must be entrusted to someone who is honest and fears Allah, and not to someone who will misuse the funds or take them for themselves. If zakat is given to someone untrustworthy who misuses it, the giver will still be held accountable for it on the Day of Judgment, and it will remain in their responsibility.

So, O servants of Allah, be diligent in fulfilling your obligations and ensure that your zakat reaches its rightful recipients, for any neglect in doing so will be a matter of accountability on the Day of Judgment.