Wealth Subject to Zakat in Islam

Wealth Subject to Zakat

• Livestock, such as camels, cows, and sheep, are subject to Zakat.
• Money, gold, or silver used as cash, business assets, and as savings are subject to Zakat.
• Crops and fruits, especially basic foods like wheat, barley, dates, and raisins, are subject to Zakat.
• Treasures hidden underground by ancients and minerals stored by Allah inside and on the surface of the earth are subject to Zakat.

Classical Jurisprudence

• Assets, such as livestock and trade assets, are subject to Zakat and are annually obligated on the principal and its increments.
• Assets, which may be materially fixed (like land) or non-fixed (like bees), are subject to Zakat and are obligated only on the growth or increase once the harvest is obtained.

Modern Wealth Subject to Zakat

• Income derived from exploited assets are subject to Zakat.
• Zakat is applicable on modern forms of wealth, considering the development and changes in human society and its economy.

Conditions of Zakat Obligations

• Zakat is only obligatory on Muslims.
• Zakat is not waived on children or insane, as it is a financial worship obligatory on wealth, not on the individual.
• Zakat is not obliged on non-Muslims until they revert, and they will not be asked for any Zakat for the period of disbelief.
• The Zakat payer must be a free person, not a slave.
• The owner must have complete ownership (Milk AtTam) of the wealth, with the right to use or dispose of it without any restriction.
• The wealth must have the potential of growth (increase from time to time).

Principles of Zakat Accounting

• Determining the Zakat Base.
• Calculating the Due amount of Zakat.
• Preparing Zakat Statements and Reports.
• Distributing Due Zakat amongst its beneficiaries.

Other Important Points

• Intention is a prerequisite for performing Zakah, according to the majority of jurists.
• The owner of exploited assets or fixed assets are exempted from Zakat, as the wealth remains as permanent capital that is unchanged (no growth).
• No Zakat for wealth used for personal use.