In terms of paper currency, money how should Zakat be calculated? The first day of the tenth Islamic lunar month, Shawwal, is Eid ul-Fitr. It marks the end of Ramadan, and it is a day of celebration and thanks to God. Most Muslims celebrate Eid for at least three days. Here is what the Prophet Muhammad, peace and blessings be upon him, used to do on the day of Eid (his Sunnahs).
Rise early in the morning.
Take a full bath.
Clean the teeth.
Wear the best clothes that he had.
Wear perfume.
Eat something sweet, like dates, before leaving home.
Go to the Eid prayer location very early. (The Prophet used to offer Eid prayer in a central location. That is, he did not offer it in a mosque of a locality without any legitimate excuse).
The Prophet used to go to the Eid prayer location by one route and would return using another route.
He used to go to Eid prayers on foot.
He used to chant slowly, on the way to the Eid prayer location, the following words: “Allahu Akbar, Allahu Akbar, Laa ilaaha illallahu, Wallahu Akbar, Allahu Akbar, Wa lillahil Hamd." (Translation: Allah is the Greatest, Allah is the Greatest. There is no god except Allah. And Allah is the Greatest, Allah is the Greatest. And to Him is all praise and thanks).
The Prophet used to give Zakat-ul-Fitr before Eid day. This is an amount of charity paid, usually to a local mosque or organization, that helps Muslims of lesser means celebrate Eid. But if you have not done so, please give now before the Eid prayer. (Giving it right before Eid prayer is fine, but it is against the spirit and the purpose of it). Contact your local Masjid to find out how much to pay for this year.
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Zakat is one of the five fundamental concepts (also known as the 5 pillars) in Islam. This makes it a compulsory act, and therefore, all Muslims must give Zakat, provided they meet certain conditions. The concept of Zakat is to purify one’s wealth and soul. Calculation of Zakat is based on the total savings of a Muslim during one lunar (Islamic) year. It is important to note that only the beginning and end of the year are taken into account. Muslims must possess a minimum “Zakatable” amount of wealth, both at the beginning and at the end of their Zakat year, for them to pay Zakat. Items like gold, silver, paper currency held in cash or in bank, tradable assets owned by a business, crops, and herded animals, are all taken into consideration when calculating Zakat.
“The alms are only for the poor or needy; and the destitute; and those employed to collect Zakat; and to attract the hearts of those who have been inclined towards Islam; and to free the captives; and for those in debt; and for Allah’s Cause; and for the wayfarer, a traveler who is cut off from everything; a duty imposed by Allah. And Allah is All-Knower, All-Wise.” [Al-Quran 9:60]
According to the Holy Quran, a Muslim should give Zakat to the following types of people:
Fuqara’:
Translated as the ‘poor’ or ‘needy’, these people have some money, but not sufficient for their everyday needs.
Al-Masakin:
Translated as the ‘destitute’, these are people of extreme poverty who possess no wealth at all, and are in need of asking others for food, clothing and shelter.
‘Amil Zakat:
These are people appointed by an Islamic Head of State or Government to collect Zakat. The authority gives them a fee for their work, which includes collecting, recording, guarding, dividing and distributing Zakat.
Mu’allaf:
These are people who have just become Muslim, or those whose circumstances are so desperate they fear turning to crime if they are not helpful.
Ar-Riqaab:
These are slaves whose masters have agreed to set them free on a payment of a fixed amount. Zakat may be used to purchase their freedom.
Ibnus-Sabeel:
Translated as the ‘wayfarers’, these are travellers stranded in a foreign land in need of money. These people can receive Zakat if the purpose for travelling is lawful.
Al Ghaarimeen:
These are the debtors, people burdened by debts because of personal needs or social necessity. These people are given Zakat if they do not have enough money beyond their basic needs to repay debts. Help is also provided to those who may have landed themselves in debt as a result of social obligations such as supporting an orphan or renovating a school. It is conditional that the debts were not created for any un-Islamic or sinful purpose.
Fi Sabeelillah:
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