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Islamic Finance: Understanding Zakat and Nisab

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Questions and Answers

What is the meaning of the word 'zakat'?

Obligation towards Allah
Fasting practice
Prayer ritual
Charity and purification (correct)

When does zakat become compulsory on one's wealth?

After performing Hajj
After the death of the owner
Immediately upon acquiring wealth
After owning the wealth for at least a year (correct)

Who is entitled to receive zakat?

Wealthy individuals
One's children and parents
The poor and needy (correct)
Non-Muslims

What is the Nisab in relation to zakat?

The minimum amount of wealth required for zakat to be obligatory (C) Signup and view all the answers

What are some examples of items on which zakat is payable?

Cash, gold, silver, and raw materials for industrial goods (C) Signup and view all the answers

What is the rate of zakat on cash, gold, and silver?

2.5% (D) Signup and view all the answers

What is the purpose of Zakat according to the text?

To ensure the rich do not forget the needs of the less fortunate (C) Signup and view all the answers

What type of charity is Aus Sadqa based on the text?

Voluntary charity based on compassion (D) Signup and view all the answers

According to Hazrat Muhammad, what qualifies as charity?

Meeting someone with a cheerful face (D) Signup and view all the answers

How does Zakat contribute to societal wealth distribution?

By promoting sharing wealth with the needy (C) Signup and view all the answers

In Hazrat Muhammad's words, what should one do if they have nothing to give in charity?

Work with their own hands for personal benefit (D) Signup and view all the answers

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