And [in the daytime and at night] establish regular prayers and pay Zakat and [for the cause of your religion and state] lend to Allah a befitting loan, and remember whatever good you send forth for yourselves you shall find it with Allah better than before and greater in reward. (73:20)
In the verse quoted above, and at numerous other places in the Qur’an, Muslims are directed to pay Zakat from their wealth. In religious parlance, Zakat means the wealth given in the way of Allah to obtain purity of heart and to obtain the blessings of Allah. The root of the word Zakat, in Arabic, has two meanings "purity" and "growth". The words "purify them" in the first and "people who will increase their wealth" in the second verse of the Qur’an quoted below allude to these two meanings of the word:
Take alms from their wealth [O Prophet!] in order to cleanse them and purify them with it. (9:103)
And that which you give as loan on interest in order that may increase on other people’s wealth has no increase with Allah; but that which you give as Zakat, seeking Allah’s countenance, it is these people who will increase their wealth [in the Hereafter]. (30:39)
Subsequently, this word was specifically used for the wealth a Muslim gives to those in authority to meet the collective requirements of a state. It is evident from the Qur’an that like Salat (prayer), Zakat has always remained an essential ingredient of the Shari`ah given to the Prophets of Allah. When the Almighty directed the Muslims to pay Zakat, it was not an unknown thing to them. All the followers of the religion of Abraham (sws) were well aware of its philosophy as well as its rates and statutory exemptions. Consequently, there was no need to state the details of Zakat in the Qur’an. It was a pre-existing Sunnah which the Qur’an only revived and which the Prophet (sws), on the Almighty’s bidding, established as a directive of he Shari`ah among the Muslims. If, irrespective of the differences of the Jurists in understanding the concept of Zakat, the details of this directive which have reached us through the consensus of the Companions of the Prophet (sws) and their practical perpetuation, and which now stand validated through the consensus of the Ummah are studied as regards their bases in the Shari`ah, then they can be stated as:
1. Items
Nothing except means of production, personal items of daily use and a fixed quantity called nisab are exempt from Zakat. It shall be levied annually on wealth of al sorts, livestock of all types and production of all forms of every Muslim citizen who is liable to it. However, if some need arises, an Islamic State can give relaxation on any item.
2. Nisab
The statutory exemptions in wealth, livestock and agricultural production are fixed as:
(a) Wealth: 5 ounces / 612 grams of silver or its equivalent.
(b) Production: 5 Wasaqs / 1119 kilograms of dates or their equivalent.
(c) Livestock: 5 camels, 30 cows, 40 goats.
3. Rates
(a) Wealth: 2 ½% annually
(b) Production: (i) 5 %: on all items which are produced both by the interaction of labour and capital, (ii) 10 % on items which are produced such that the basic factor in producing them is either labour or capital and (iii) 20% on items which are produced neither as a result of capital nor labour but actually are a gift of God.
(c) Livestock:
(i) CAMELS
--- From 5 to 24: one she-goat on every five camels.
--- From 25 to 35: one one-year old she-camel or in its absence one, two-year old camel.
--- From 36 to 45: one two-year old she-camel.
--- From 46 to 60: one three-year old she-camel.
--- From 61 to 75: one four-year old she-camel.
--- From 76 to 90: two two-year old she-camels.
--- From 91 to 120: two three-year old she-camels.
--- Over 120: one two-year old she-camel on every forty camels and one three year old on every fifty camels.
(ii) COWS
--- one one-year old calf on every thirty cows and one two-year old calf on every forty cows.
(iii) GOATS
--- From 40 to 120: one she-goat.
--- From 121 to 200: two she-goats.
--- From 200 to 300: three she-goats.
--- Over 300: one she-goat on every hundred goats.
4. Heads
The heads in which Zakat is to be spent were never unclear. It was always expended on the poor and needy and on the collective requirements of the Muslims. However, when the hypocrites in the time of the Prophet (sws) raised certain doubts about these heads, the Qur’an unequivocally stated them:
Zakat is only for the poor and the needy, and for those who are ‘amils over it, and for those whose hearts are to be reconciled [to the truth], and for the emancipation of the slaves and for those who have been inflicted with losses and for the way of Allah and for the welfare of the wayfarers. An obligation decreed by the Almighty, the All-Knowing and the Wise. (9:60)
Here are some details of the heads of Zakat mentioned in this verse:
(a) The poor and the needy.
(b) al-`aamilina `alayha:* the salaries of all the administrative officials of the state .
(c) al-mu'allafat-i-qulubuhum: all political expenditures in the interest of Islam and the Muslims.
(d) Fi al-riqab: For liberation from slavery of all kinds.
(e) Gharimin: For helping people who are suffering economic losses, or are burdened with a fine or a loan.
(d) Fi sabilillah: For serving Islam and for the welfare of the citizens.
(e) Ibn al-sabil: For helping travellers and for the construction of roads, bridges and rest houses.
This is all as far as the Shari`ah regarding Zakat is concerned. However, since there exist some general misconceptions about it, the following points must remain in consideration:
Firstly, there is no basis in the Qur’an and Sunnah for the condition of personal-possession (tamlik-i-dhati) imposed by our jurists. Therefore, just as Zakat can be given in the personal possession of an individual, it can also be spent on projects of his welfare**.
Secondly, if the basis of the directive is taken in consideration, industrial produce of all forms, production of all forms based on various skills, rent of various items or buildings of all forms and fees of all forms obtained in various ventures must be classified as produce and not as wealth; therefore, their rates and nisab should be those specified by the Prophet (sws) for land produce.
Thirdly, according to the above mentioned principle, Zakat on leased-out houses, properties and other rented items should be 10% of the rent and if they are not rented out, it should be 2 1/2 % of their market value.
Fourthly, the nisab of all items which are analogously linked such as those above, can be fixed by the state if need be by analogy with the ones specified.
*. This is because state servants in reality collect Zakat and disburse it in its heads (al-`aamilina`ala akhdh al-dara`ib wa raddiha il al-masarif). Consequently, this is a very subtle expression the Qur’an has adopted here to convey its purport. No doubt, that generally people have not been able to comprehend this expression; however the construction I have referred to above of this expression unfolds this meaning upon very little deliberation.
**. For a detailed discourse on this topic please see "Mas`alah i Tamlik" in Islahi’s "Tawdihat".