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BY Mufti Muhammad Taqi Usmani

Praise be to Allah. We praise Him and seek His help and ask Him for His forgiveness. We seek refuge in Allah from the evil of our souls and from our sinful deeds. He whom Allah guides, no one can mislead and He whom He leaves astray none can guide. And we bear witness that there is no god except Allah who is alone and who has no partner and we bear witness that Sayyidina Muhammad is His servant and Messenger, may Allah bless him and his family and companions and may He favour him and give him peace a complete peace abundantly.

I seek refuge in Allah from the accursed Satan. In the Name of Allah the Compassionate, the Merciful.

"And those who hoard up gold and silver and expend it not in the way of Allah, so give them the glad tidings of a painful chastisement, on the day when it shall (all) be heated in the Fire of Hell, and there with their foreheads and their sides and their backs shall be branded, (saying), This is what you hoarded up for yourselves, so taste you now what you used to hoard up.” (At-Tawbah, 9:34-35)

I have believed in Allah. Allah, our Great Protector, has spoken the Truth and His Messenger, the noble Prophet, has spoken the Truth and we are witnesses over that and grateful. Praise belongs to Allah, Lord of the worlds.

Introduction
The gathering today has before it the subject of Zakah- There are a few days to the month of Ramadan and Muslims generally pay Zakah in this holy month. So, the time is opportune to discuss the importance of Zakah, its virtues and the necessary procedure and rules. This will enable us to pay Zakah properly.

Admonition for not paying Zakah
It is for this reason that I have quoted two verses of the Holy Quran. These verses speak of the serious warning that Allah has given to those people who do not pay Zakah on their assets as prescribed. Very strong words are used to warn them of the punishment. So, the Qur'an says, "Those who hoard up gold and silver and expend not in the way of Allah so (O Prophet) give them tidings, of a severe punishment." These are the people who continue to hoard their wealth, gold and silver and do not spend in the cause of Allah and do not fulfill the duties imposed on them by Allah so let them have the glad tidings of a painful punishment. Then, the next verse describes the kind of the painful punishment. This punishment will be awarded on the day when the gold and silver will be heated in the fir of Hell and with it the man's forehead, and his sides and back will be branded. And it will be said to him:

This is what you hoarded up for yourself so taste now what you used to hoard up. May Allah preserve all Muslims from this Punishment. Aameen

The fate of the people is described who store up wealth but fail to discharge their duties correctly. The warning is given not merely in these verses but it is given in other verses of the Qur'an too. For instance, we are told in surah al Humazah.

Wo to every slanderer, defamer, who amasses wealth and counts it. He thinks that his wealth will make him live forever! Certainly not! He shall be thrown into the Hutamah. And what the Hutamah is? It is the fire kindled by Allah, which roars over the hearts, (al Humazah, 104:1-7)

He will be punished because of his wealth against which he did not pay the dues. The Hutamah is a fire kindled by Allah not by any man whose kindled fire can be extinguished by water or sand. The fire kindled by Allah will burn man's heart and liver (that is it will reach upto his heart and liver). This is a very grave warning. May Allah protect every Muslim from it. Aameen!

From where is the wealth coming
Why is such a strong warning given for not paying zakah? It is to be considered first where one gets one's wealth from? Whether he is engaged in business, employment, agriculture or in other occupation, does he think that he amassed the wealth by his own effort? In fact, it is a system drawn up by Allah through which He provides livelihood to different people.

Who sends the customers?
A shopkeeper supposes that he has opened his shop and sells his merchandise and so earns wealth but he does not consider who sends customers to his shop. Suppose if no customer had visited him, would he have earned money? It is Allah who sends his customers and who has formed a system whereby each fulfils the need of the other. He prompts one to set up a shop and another to visit his shop.

An eye-opening event
I had an elder brother, Muhammad Zaki Kayfi, may Allah elevate his rank. He had a bookshop in Lahore, Idara Islamiyat. That shop is still in business. He told me once that very unique acts of Allah are witnessed in business. He cited an example of a morning when he woke up to see it rain heavily. Water had flooded the streets. He thought that it was better to stay home rather than open the shop because no one would buy a book especially a religious book. People generally put a religious book last on their list till everything else is bought and there is spare money. This is because books do not satiate the hungry nor do they quench the thirst. When one's needs are fulfilled and he has some money on hand he will prefer to buy a fiction or a novel.

However, my brother had lived with the religious-minded and had been with Mawlana Thanavi (rah) so he said to himself, "It is okay if no customer visits my shop but Allah made it a source of my livelihood so it is my duty to open it and wait. To get a customer to visit my shop is not my task; it is on someone else to send him to me. I must not lag behind in my duty whether it rains or there is flood." So, he took his umbrella and waded through water to his shop. He opened it and waited for his customers. Not expecting one, he opened the Qur'an and began reciting it. Hardly had he begun the recital when he saw some men in raincoats and holding umbrellas enter his shop to buy books and he wondered what had made them brave in the rain and floods to visit a bookshop. This happened all day and his sale that day was the same as his sale on a normal day. He then realised that the customers did not come on their own but were sent by someone because He has appointed his livelihood through his shop.

Distribution of labour is by Allah
It is a system organised by Allah that He sends customers to different people. No one else has distributed different tasks and business to different people. It is Allah who has put in the hearts of men that they should do different tasks and take up different occupations and businesses. Someone sells cloth, someone shoes, someone rice, someone utensils and so on. In this way everyone sees to the needs of the other. There has never been an intentional worldwide distribution of labour whereby everyone was asked to do something or the other. It has been an automatic, unplanned distribution of tasks. The result is that everything that is necessary is available in the market and there is a buyer for everything sold. In other words, a means of livelihood is available to different people. This system is orginised by Allah and it provides livelihood to different people.

Who grows food from the land
Whether one is engaged in a business, in farming or in an employment, He is Allah who really provides sustenance. Let us take agriculture for example. The farmer tends to the land and sows the seeds. He then irrigates the land but He is Allah alone who causes the seed to sprout. A seed which really is lifeless and weightless but it pierces the tough earth to make itself known. Its roots are very delicate, so much that even a child may undo them with his fingers but they are strong enough to tolerate the severity of the varying seasons and the winds. Passing different stages, the seed finally grows the fruit that is consumed by the people the world over. Allah alone brings these things to happen.

Man is not capable of producing anything
Therefore, whatever the means of income, man is on the earth to do a limited task and he does that but he is not able to cause anything to grow. He is Allah alone who produces what is necessary and grants it to mankind whatever man has is a blessing from Allah

To Allah belongs whatsoever is in the heavens and whatsoever is in the earth. (Ai-Baqarah. 2:284)

The real master is Allah
After giving things to man, Allah also said to him, "You are the owner." Thus, He has said in Surah Yasin.

"Have they not seen that we have created for them - among the things which our hands have fashioned-cattle that they own." (Surah Yasin. 36:71) "I was the Real Owner but I made you the owners. So in the things that have come to your possession true right belongs to Me. Then spend in the way, I have commanded you." If a man spends in accordance with the commands of Allah then the rest of his possessions are lawful for him and blessings of Allah are on those possessions. If he does not give from his wealth what Allah has asked him to give then all of it is fire for him and he will experience the fire on the Day of Resurrection when he will be branded with it and told, "This is the wealth that you had amassed."

Only 2 1/2% is to be paid
If Allah had said, "Keep to yourself the 2 1/2% and spend in His way the rest 97 1/2% then that would have been just because all really belongs to Him and is granted by Him. But He is Merciful to His slaves and asked them to retain the bulk share of 97 1/2% and spend in His way only 2 1/2% because man is inclined towards possession. The 97 1/2% will then become lawful and pure; it may be spent on his lawful personal needs.

Emphasis on Zakah
The 2 1/2% is zakah. The Quran has said about it. And establish the Salah, and pay the Zakah. (al-Baqarah, 2:43)

At the same time as prayer is mentioned, Zakah is also mentioned. This is the importance attached to Zakah. lf that is the case and the wealth also is a grant from Allah then a Muslim must, at least, make the 2 1/2% payment in accordance with the Command of Allah. He will not suffer anything if he pays this small amount.

Zakah must be calculated and paid
Many people just neglect payment of Zakah. They simply do not pay it. There are some others who pay Zakah but do not bother to calculate the correct procedure is to assess the wealth and possessions and pay the 2 1 / 2% on it. They shy away from counting their stocks and possessions and estimate the Zakah payable on that. This could lead to an error and a lesser amount could have been estimated and even if an insignificant amount as low as one rupee is underpaid then it is enough to ruin the rest of the wealth. If an over payment is made then, InshaAllah, there will be no questioning on that.

When Property causes Ruin
We are told in a Hadith that the Messenger of Allah (saws) said, "When zakah becomes part of a wealth - that is, when full zakah is not paid but something of it remains unpaid - then that wealth becomes a means of ruin for the owner." Therefore, we must be careful in evaluating our wealth and pay the full zakah due on it otherwise the obligation remains unobserved. By the Grace of Allah, a majority of Muslims pay zakah but they are not careful in making a proper calculation before paying it with the result that something of zakah remains included in their wealth. That becomes a cause of destruction and ruin.

Benefits of Zakah in this life
Zakah must be paid with the intention that the command of Allah is being observed, it is the demand of His pleasure and a form of worship is being fulfilled. Whether benefit from that payment or not, our aim should be to obtain the pleasure of Allah. This is the true aim of zakah. It is the mercy of Allah on us that when anyone pays zakah, Allah lets him have its benefits too. His possessions and wealth are blessed as we are told in the Quran an

Allah blots out usury and augments charity (al-Baqarah, 2:276)

A Haidth quotes the Holy Prophet (saws) as saying, "When a slave of Allah pays zakah, the Angels of Allah pray for him in these words :

"O Allah! Grant abundance to him who spends (in Your cause) and destroy him who does not spend and restricts to himself his wealth." (Bukhari Book of Zakah)

That is why, he said : Charity does not diminish wealth

So, it happens sometimes that as a Muslim pays Zakah, Allah opens for him Fresh Avenue of income so that he receives more than he has paid in zakah. It happens sometimes that although payment of zakah seems to reduce wealth to the extent of payment, Allah blesses the remaining wealth so it provides more benefit than expected from it.

Consequences of lack of blessings in wealth
Today, everyone believes in numbers. No one understands what one means by blessings. It is the name given to benefit beyond expectation from something- For example, someone earns a lot of money someday and takes his earnings home only to find a child ill and only one visit to a doctor costs him all his day's earnings. This means that there was lack of blessings in his earnings. Or, he encounters bandits on the way who disown him of his earnings. This is also an example of lack of blessings in his wealth. Or, the man buys food from his earnings and eats it only to get indigestion. This again is an example of lack of blessings in his earnings. On the other hand, blessings in a man's earnings allow him to reap more benefit from his little earnings than he had expected. Allah showers blessings on him who does what Allah has commanded him to do. Therefore, we must pay zakah on our wealth in the manner Allah and His Messenger (saws) have instructed us to pay and make a correct calculation, not a mere conjecture.

The Nisab of Zakah
Allah has prescribed a Nisab (standard) for Zakah. Nisab is the minimum amount of property liable to payment of zakah. If anyone owns property less than the Nisab then he is not liable to pay zakah but when he possess the nisab he becomes liable to pay zakah on it. The nisab is :fifty two and a half tolas of silver or its value in cash or jewellery or commercial merchandise. The person who has this much wealth is known as Sahib Nisab (owner of the property liable to zakah).

It is not necessary that each rupee should have been owned for a year
Zakah is payable by the Sahib Nisab when he has the nisab in his hands for a year. Zakah is then wajib on him. There is a misconception generally that a man should have every part of his money or wealth for a year to be called a Sahib Nisab and only then will zakah be wajib on him. It is not so. Rather, if a man becomes a Sahib Nisab at one time say the 1st of Ramadan and then again on the next 1st Ramadan he is a Sahib Nisab. He is liable to pay zakah even if during the year he did not constantly have that much wealth. On the 1st Ramadan when the first year is over and the next begins he will pay zakah on what he owns even if he may have had some of the wealth only for a day.

Zakah is payable on the wealth one owns on the date of Zakah
For example, a man had a hundred thousand rupees on the 1st of Ramadan. Next year two days before this date he received another fifty thousand rupees so on the 1st Ramadan he had a hundred and fifty thousand rupees. It is now fard (absolute obligation) to pay zakah on this amount of a hundred and fifty thousand rupees. He cannot argue that he has had fifty thousand rupees for only two days so he will not pay zakah on that amount because that money has not been with him for a year. Rather, he will consider the date of payment of zakah, the date when he became a Sahib Nisab, and value his assets and pay zakah on these assets. The value may be more than the last year's value or it may have become less. For example, he had a hundred thousand rupees last year and he may have a hundred and fifty thousand in the current year so he will pay zakah on the current value of a hundred and fifty thousand rupees. Or, he may have only fifty thousand rupees this year then he will pay zakah on the amount of fifty thousand rupees only. The amount of money spent during the year is not calculated and no zakah is paid on the money so spent. Allah has spared man from the intricacies of accounting and has prescribed an easy method so that he has not to worry about the money that he has spent and used up. In the same way, whatever money is received during the year has not to be recorded separately. It is so simple that whatever money and assets a man has on the date of zakah, he will pay zakah on that amount. This is the meaning of the words 'passing of a year.'

On what heads is Zakah payable
It is one of the several favours of Allah on us that He has not made it fard (obligatory) on us to pay zakah on every item we possess, for there are different heads of assets a man may own. The items on which zakah is fard are:
(1) Cash in any form like currency notes or coins.
(2) Gold and Silver whether jewelry or coins. Some people suppose that jewelry used by women is not liable to zakah which is a wrong notion. The truth is that zakah is payable on the jewelry that is worn or used and made of gold or silver; however, zakah is not applied on jewelry made of any other metal such as platinum. Similarly, zakah is not paid on pearl or jewel as long as they are in personal use and not for business purposes.

We must not apply reasoning in these matters
We must remember that zakah is a form of worship and a duty imposed on us by Allah. Some people try to reason out the wisdom behind different rulings and ask why zakah is applied on some things and not on others. To pay zakah is to perform a worship whether we understand the reason behind it or not. Thus, we cannot ask why zakah is payable on gold and silver and not on Pearls, jewels and platinum. It is like asking why the Maghrib prayer is not reduced during a journey while the Zuhr, Asr and Isha prayers are reduced to the Qasr. Qasr for these three prayers two is rakaat each instead of four while one is travelling. Or, it is like asking why a passenger who travels luxuriously by first class in an airline is allowed to offer Qasr prayers while another traveling with great difficulty in a local bus within his city not allowed to offer Qasr prayers. The answer to all such questions is the same that these are rules of worship prescribed by Allah and these rules must be respected otherwise the worship will be meaningless.

To offer worship is to obey the Command of Allah
It is also like asking why Hajj is observed on 9th Zul Hajjah and not on just any day convenient to a pilgrim, and why stay just one day at 'Arafah and not three days. Obviously, if anyone stays at Arafah for three days instead of one day his Hajj will not be valid because he does not follow the method prescribed by Allah. Again, a man cannot say that he will perform the Rami of the Jamarat all together on the fourth day instead of the three days of Hajj. Rami is the casting of pebbles on the Jamarat, the pillars marking places where Satan tried to tempt Sayyidina Ismail (as) This also is a form of worship and a worship should be performed in its prescribed manner otherwise it is invalid and meaningless. Thus they raise an objection on the levy of zakah on gold and silver and not on pearl is to question the philosophy of worship-Nevertheless, Allah has prescribed zakah on gold and silver whether in use or not, and on cash money.

Method of valuing merchandise of trade
Zakah is also paid on merchandise of trade. For instance, if someone has stock-in-trade at his shop then he will have to pay zakah on all his stock. However, at the time of valuation the shop-keeper is at liberty to value his stock at the price his good would fetch if sold in bulk. There is a retail price, a wholesale price and a price that would apply to the entire stock sold together. So, there is a scope to price the stock at such a price and then pay zakah at 2 1/2%; however, it is safer to use the wholesale price.

What is stock-in-trade
Everything that a man buys with intent to re-sell is stock-in-trade. Thus, if anyone buys a piece of land to re-sell at a higher price, or a house or car, then these things are his trading merchandise. Zakah is wajib (obligatory) on all these things because he had acquired them with intent to sell. Many people buy a piece of land as an investment intending to sell it later at a higher price and making a profit in the process. Zakah is payable on the value of this land. However, if anyone buys a piece of land with the hope that if he has an opportunity he will construct a house thereon for his personal use, or give it on rent or alternatively, sell it off so having' no definite intentions;. he has not made a choice of the three options then zakah is not payable on that piece of land. Zakah is only wajib when the intention at the time of buying was clearly to re-sell. Even if anyone buys a piece of land with intent to construct a house for himself but later on he changes his mind and decides to sell it, a mere change of intention does not involve any liability on him to pay Zakah; only after he actually sells the land and receives the sale proceeds will he have to pay zakah on that.

So, everything that is bought with intent to re-sell is stock-in-trade and attracts zakah at two-and-a-half percent

The date of valuation
It must be remembered too that the date of valuation is the date of calculation of zakah. If a piece of land was purchased for a hundred thousand rupees and values a million rupees on that date then will zakah be paid, on the latter value and not on one hundred thousand rupees.

Zakah on share certificates
Share Certificates are also stock-in-trade. There are two possibilities: a man may buy shares to receive annual profit from the company and another may buy them to sell them at a higher price.
In the second case where a man buys shares with intent to do business and sell them at a higher price then zakah is wajib on the full market value of the shares. For instance, if the purchase price was Rs.50 and the current market value is Rs.60 on the day of calculating zakah then the shares will be valued at Rs.60 and zakah is to be paid at 2 1/2%.

However, in the first case where the man did no intend to re-sell his shares at the time of purchase but hoped to receive annual profit on them he is allowed to find out the fixed assets of the company and its liquid assets and he may pay zakah on the proportion of liquid assets in his shares. The fixed assets include building-machinery, cars, etc. while the liquid assets comprise of cash, stock-in-trade, raw material and finished goods-Suppose, the fixed assets form forty percent of its overall assets and the liquid assets form sixty percent, the share-holder will value his share holdings at the market value and pay zakah on sixty percent of that value. Thus, if the market value of each share is Rs.60 and the assets on which zakah is payable comprise 60% of the assets while the remaining do not attract zakah then the value of each share liable to zakah is Rs.36. If this data cannot be found out from any company then zakah will be paid on the full market value.
Every other financial instrument apart from shares will be categorised with cash whether they are bonds or certificates. Zakah will be paid on their face value.
Factory Assets that attract Zakah

The finished product in a factory is liable to be valued for zakah. In the same way, zakah is payable on the merchandise at different stages of production and on raw materials. However, zakah is not payable on factory machinery, building, cars etc.

In the same way, if anyone is a partner in a business then he will be liable to pay Zakah on the market value of his share in business.

In short, zakah is payable on cash which includes cash at bank and financial instruments, on stock-in-trade that includes finished products, raw material and merchandise under different stages of production, on share certificates which are also included in stock-in-trade, and on everything else that is classified as stock-in-trade which anyone has bought with intent to re-sell.

At the time of paying zakah the gross value of all these things must be found out and zakah paid on that value.

Zakah on Loans Receivable
Apart from these, certain sums of money are receivable from other people. Either loans are given to them or sales are made to them on credit. So, when one calculates the gross value on which he has to pay Zakah, he must include sums receivable from all such sundry debtors. Although Shari'ah tells us that until sums receivable are not actually received Zakah is not payable on them yet when they are received Zakah is paid for every past year it was payable on them but not paid. For example, if anyone had loaned another person a sum of a hundred thousand rupees and he receives it back after five years then although it was not Wajib for him to pay Zakah on this sum of money for the five years yet once he had received it back then he will have to pay Zakah for each of those five years. Now, since it becomes very difficult sometimes to pay previous dues of Zakah all together so it is better to pay it each year regularly on the loan receivable. So, when a man calculates the Zakah payable to him, he may include sums receivable in the gross value.

Debts be deducted
The debts payable must be added up and their total deducted from the gross value of possessions on which Zakah is payable. On the net value, Zakah is paid at 2 1/ 2%. It is better to keep apart the Zakah payable and disburse it among those entitled to receive it from time to time.

Loans are of two kinds
We must understand that loans are of two kinds. The first kind is that loan which one ordinarily borrows for personal meds or to meet contingencies. The second type of loans are those which the capitalists take to finance their commercial projects for expansion. For instance, they borrow to set up a factory, buy machinery, import trading merchandise or to set up additional factories, etc. Now, if this second kind of borrowing is deducted from the gross value of possessions to arrive at the net wealth that attracts zakah, then not only will these capitalists find themselves not liable to pay zakah but also in fact, some of them might find that they are entitled to receive zakah. This is because they borrow from the financial institutions more than what they possess of zakah leviable wealth. They are poor people from this point of view. Therefore, Shari ah has distinguished the different borrowings when the question of deduction arises.

When are commercial borrowings deducted
The first kind of loans will be deducted from the gross value and zakah will be paid on the net value. As for the second kind of borrowings, if anyone borrows money for commercial purpose to finance anything on which zakah is levied (for instance, raw material) then the borrowings will be deducted from the gross value. But. if the borrowings are to finance such things as do not attract zakah then the loans will not be deducted from the gross value.

Examples of borrowings
Suppose someone borrows from a bank ten million rupees to buy machinery. Since zakah is not levied on plant and machinery, the loan will not be deducted from the gross value of his assets on which zakah is payable. But, if he purchased raw material from the borrowed money then the value of borrowings will be deducted from the gross zakah leviable value because the raw material itself attracts zakah, and is already included in the gross value.

In short, normal borrowings are deducted from the gross value but commercial borrowings are not deducted if used to finance something on which Zakah is not paid, but deducted if used to finance anything on which Zakah is paid. These were rules concerning payment of Zakah.

Zakah is paid to the entitled
Let us now see the rules concerning disbursement of zakah. My respected father, Mawlana Mufti Muhammad Shafi (rah) used to say that Allah has not asked us to just give out zakah but He has commanded us to pay it carefully and distribute it to the proper entitled people, not give it out injudiciously. The directions of Shari ah should be heeded while distributing zakah. Some people pay zakah but do not care to distribute it to the right people and do not care if it is put to proper use. They hand over the zakah money to someone without ensuring that he uses it for proper causes. There are many institutions that collect zakah and there may be many among them who do not make sure that money under this head is put to proper use. Therefore, zakah must not just be handed over but must be paid out with care.

Who is entitled?
Shari ah has prescribed the principle that zakah must be paid to only those who are not themselves Sahib Nisab. Even those people, who have in their possession anything more than their needs and which is worth as much as the value of fifty two and half tolas of silver, are not entitled to receive zakah. Such people are entitled to it who do not have anything equal to the value of fifty two and a half tola of silver after meeting their needs, whether cash or anything of that value.

The entitled must be handed over ownership
The Shari ah commands us that the person entitled to zakah must be made owner of it when the amount is paid over to him. This means that he should have a free say in his property. This is why zakah cannot be used to construct a building and cannot be paid as salary of the employees of an institution. If it was allowed to use zakah to build and establish institutions then it would have been misused, the buildings require much money and the institutions pay heavy salaries. Therefore, one who is not a Sahib Nisab must be paid zakah and transferred ownership over it. Zakah must be paid to only such people and only then is zakah validly paid.

The relatives who may be paid Zakah
The duty to pay zakah encourages the Muslim to spend the money under this head in a proper cause. He looks out for the right people and makes out a list of those entitled to receive it. He then disburses the amount to these people and it is one of his responsibilities to do so. One must pay zakah to those who are entitled and who live in his neighbourhood, who are his acquaintances, relatives and friends. The most excellent act in the payment of zakah is to pay it to those of one's relatives who are entitled and this secures him a dual reward - against payment of Zakah and against strengthening ties of relationship. Zakah may be paid to every relative who is entitled to it except two the relationship of father and son so neither father nor son can Pay it to the other, and the marital relationship so the spouses cannot pay of zakah to one another. All other relationship do not bar payment of Zakah, for example, one can pay it to a brother and a sister, an uncle or an aunt whether paternal or maternal, the only condition is that they should be entitled to it.

The command to pay Zakah to a widow and to orphans
Some people suppose that a widow must be paid zakah preferably but the condition stands here too that she must be one who is entitled to it and not a Sahib Nisab. If she is thus entitled then it is excellent to pay zakah to her. But, if she is a widow but not entitled then being a widow does not qualify her to receive zakah. In the same way, it is excellent to pay zakah to an orphan provided he is entitled to it but if he is not entitled being a Sahib Nisab then it does not qualify him to receive the zakah, although he is an orphan. These rules must be borne in mind while paying zakah to anyone.

Deduction of Zakah from Bank Accounts
For some time now, zakah is collected by the government and the financial institutions do it for the government as also some companies who deduct zakah and pay it to the government. This calls for some comments.

As far as banks and financial institutions are concerned, zakah of a person stands paid when deducted by them and he is not required to pay that again. However, he may form an intention on the 1st of Ramadan as a precautionary measure that he is paying the zakah so that his duty in this regard is discharged and he may not pay it again. Some people are in doubt that before the full year passed on their entire wealth, zakah is being deducted on all of it. I have stated earlier in this discourse that it is not necessary that a full year should pass on every part of the wealth. If anyone is a Sahib Nisab then even the wealth he gets a day before the year ends will be added to the gross value and the zakah deducted on it is correctly charged because zakah is wajib on that wealth.

Deduction of loan from the Bank Balance
However, someone may have all his wealth in cash in a bank account and not have anything else with himself. Then, he may also be a debtor and have to pay to other people, the bank will deduct zakah on the due date and he will not be able to deduct the "payables" from his gross wealth. There is one solution for that. He may withdraw the money from his account or transfer it to a current account before zakah is deducted because zakah is not deducted from a current account. Let me mention here in passing that everyone must maintain a current account and not a savings account because interest is paid on the savings accounts and that is unlawful. When he withdraws his money from the savings account, or transfers it, he will be able to take into account the "Payables" while calculating zakah. Alternatively, he may write to the Bank that he is not a Sahib Nisab and not liable to pay zakah. According to law, the Bank will not deduct zakah from his account when he writes to them in this way.

Deduction of Zakah on Shares by the Company
There is also the question of shares. When the company pays the annual dividend, it also deducts zakah but it calculates zakah on its face value while it should have been on the market value. So, while the zakah has been duly paid to the extent of the face value, the shareholder must calculate the difference between the market value and face value on the basis of the explanation under the head "Zakah On Share Certificates". For instance, the face value of a share is fifty rupees on which the company deducts zakah but the market value is sixty rupees, so the share-holder must pay zakah on ten rupees by himself. This applies to share certificates and N.I.T. Units. Thus, whenever zakah has been deducted on face value, the difference between the market value and face value must be calculated and zakah paid thereon.

The date of Zakah
Shari ah has not fixed a date for calculating zakah nor any period or date for its payment. In fact, every person may have his own date. In the eyes of Shari ah the true date begins when anyone becomes a Sahib Nisab. If anyone becomes a Sahib Nisab on the 1st Muhurrum then his date for zakah is that date and in future, he will calculate his zakah on the 1st of Muhurrum. But, often people do not remember when they became Sahib Nisab so they may fix any date when it is easy for them to calculate their liability. They may follow that date every year in future and it is good to pay a little more as a precautionary measure.

Can one fix a date in Ramadan
Normally, people pay zakah in the month of Ramadan because a Hadith tells us that observance of a fard (absolute obligation) in Ramadan entitles to a reward equal to seventy times. Thus payment of zakah will also fetch them a reward seventy times the normal reward. This is a correct thinking and commendable too but if anyone remembers his date when he became a Sahib Nisab then it is wrong for him to seek a date in Ramadan. He must calculate his zakah on the date he remembers; however, if he pays the calculated zakah in small amounts then he may pay the remaining in the month of Ramadan. If he does not remember his date then there is an excuse for him to fix a date in Ramadan. But he must pay a little more so that he may make up for any shortage because of difference in date.

Then He may go by that date every year and calculate his wealth accordingly. He may add up his wealth on that date, cash, gold holdings, shares, stock-in-trade, etc. and get their values on that date. He may not then change the date again.

This was a little comment on zakah. May Allah cause us to observe the commands that call on us to pay zakah. Aameen.

Taken from Discourses on Islamic Way of Life Vol Ix

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