Fiqh-us-Sunnah, Volume 3: Monetary holdings subject to zakah
Islam enjoined zakah on crops, fruit, livestock, merchandise, minerals,gold, silver, and treasures.
Says Allah concerning zakah on gold and silver: "... As for those whohoard treasures of gold and silver and do not spend them for the sake ofAllah--warn them of grievous suffering [in the life to come]" [at-Taubah34]. Thus, zakah is prescribed for gold and silver--whether they are in theform of coins, ingots, or dust--as long as the amount owned constitutes anisab, a period of a year has passed, debts are settled, and/or basic needssatisfied from it.
The minimum of nisab for gold is twenty dinars owned for one year. Its dueis a quarter of a tenth, that is, half a dinar. For any amount over twentydinars, a quarter of a tenth is levied upon it. 'Ali reported that the Prophet,upon whom be peace, said: "There is nothing upon you in gold, until itreaches twenty dinars. Thus, if you have twenty dinars at the end of the year,then there is half a dinar levied on it [as zakah]. Any additional amount willbe calculated in this manner. There is no zakah on property until it has beenowned for one year." This hadith is related by Ahamd, Abu Dawud, andal-Baihaqi. Al-Bukhari grades it authentic and alHafizh verified it.
Zuraiq, the Fazarah clan's protege, reported that 'Umar ibn 'Abdulaziz wroteto him after he became caliph: "Take what passes by you of the commerce ofthe Muslims--those who trade with their properties--a dinar for each fortydinars. From that which is less than forty, calculate on the lesser amountuntil it reaches twenty dinars. If you have to take one-third of a dinar, disregardit and do not take anything on it. Afterwards, give them a written release ofwhat you have levied from them until the year expires." This is related byIbn Abu Shaibah.
Malik says in his al-Muwatta': "The uncontroversial tradition that wehave is that the zakah due on twenty dinars is like the zakah due on twohundred dirhams." Twenty dinars are equal to twenty-eight Egyptian dirhamsin weight.
There is no zakah on silver until the amount exceeds two hundred dirhams.The amount payable is a quarter of a tenth for any amount. There is no zakahexemption on (silver) coins if they attain a nisab.
'Ali reported that the Prophet, upon whom be peace, said: "I exempt youfrom paying zakah on horses and slaves. Pay, then, zakah on silver, one dirhamfor each forty dirhams. Zakah is not due on ninety or one hundred dirhams ofsilver. If it reaches two hundred dirhams, five dirhams are to be paid."This was related by the authors of as-Sunnan (The Traditions). At-Tirmizhirelates: "I asked al-Bukhari if he confirms this hadith. He said: 'It isauthentic.' " At-Tirmizhi also says: "Jurists recognize that sadaqahshould be taken out of any amount less than five ounces (awaq). One ounce(uqiyyah) equals forty dirhams. Five awaq equal 200 dirhams. Two hundreddirhams equal twenty-seven riyals equal 555 1/2 Egyptian piasters."
If a person owns gold and silver, but neither of them on its own constitutesa nisab, he should not combine the two in order to obtain a nisab. This isbecause they are not of the same kind. The basic rule is that no category canbe combined with another. It is the same for cows and sheep. For example, ifsomeone has 199 dirhams and nineteen dinars, he is not supposed to pay zakah onthem.
Debts are of two kinds:
-1- A debt which is acknowledged by the debtor with the willingness to payit off, and
-2- A debt which is not acknowledged either because the borrower isinsolvent or its payment is deferred.
In the first case, scholars have formed the following views:: The firstview:
'Ali, ath-Thauri, Abu Thaur, the Hanafiyyah, and the Hanbaliyyah hold thatthe creditor should pay zakah on the debt, provided he has received it from thedebtor, in that zakah will be payable retroactively.: The Second view:
'Uthman, Ibn 'Umar, Jabir, Tawus, anNakha'i, al-Hasan, az-Zuhri, Qatadah,and ash-Shaf'i hold that the creditor should pay zakah on the value of a debtowed on time, even though he did not receive it yet, since he is eventuallygoing to receive it and use it. It is similar to the zakah of any depositedamount.: The third view:
'Ikrimah, 'Aishah, and Ibn 'Umar hold that no zakah is due on debt since itdoes not grow. It is similar to the case of acquired assets.: The fourth view:
Sa'id ibn al-Musayyab and 'Ata ibn Abu Rabah hold that zakah should be paidfor one year if the debt is returned to the creditors.
-2- For the second case, Qatadah, Ishaq ibn Abu Thaur, and the Hanifiyyahhold that its zakah is not compulsory on this type of debt, since the creditorcannot benefit from it. Ath-Thauri and Abu 'Ubayd hold that on receipt (of it)the creditor should pay its zakah retroactively since it his and he may use it athis own free will, like the zakah on the debt of a rich person. The last twoviews are attributed to ash-Shaf'i. 'Umar ibn 'Abdulaziz, alHasan, al-Layth,al-Auza'i and Malik agree that he should pay zakah on it for only one year whenhe receives it.
Since they are documents with guaranteed credits, banknotes and bonds aresubject to zakah once they attain the minimum of nisab--that is, a person maychange them into currency immediately. The minimum of nisab is twenty-sevenEgyptian riyals.
Scholars agree that no zakah has to be paid on diamonds, pearls, sapphires,rubies, corals, chrysolite, or any kind of precious stones unless they are usedfor trade. There is, however, disagreement over whether women's gold or silverjewelry is exempt. Abu Hanifah and Ibn Hazm hold that zakah is compulsory ongold and silver jewelry provided they constitute a nisab. Their view is basedon the report of 'Amr ibn Shu'aib from his father from his grandfather:"Two women with gold bracelets on their wrists came to the Prophet, uponwhom be peace. The Prophet said: 'Do you want Allah to make you wear braceletsof fire on the Day of Judgment?' They answered: 'No.' He said: 'Then pay the zakahwhich is due on what you wear on your wrists.' "
In the same way, Asma' bint Yazid reported: "My aunt and I, whilewearing gold bracelets, went to the Prophet, upon whom be peace. He asked: 'Didyou pay their zakah?' She related that they had not. The Prophet said: 'Do younot fear that Allah will make you wear a bracelet of fire? Pay its zakah.'" Al-Haythami confirms that it was narrated by Ahmad, and its chain isgood.
'Aishah narrated: "The Messenger of Allah, upon whom be peace, came tome and saw me wearing silver rings. Thereupon, he asked: 'What is this,'Aishah?' I replied: 'I made them to adorn myself for you, O Messenger ofAllah.' He said: 'Did you pay their zakah?' I said: 'No, or what Allah wishes.'Then he said: 'Their punishment in Hell is enough for you.' " This isrelated by Abu Dawud, ad-Daraqutni, and al-Baihaqi.
Malik, ash-Shaf'i, and Ahmad ibn Hanbal hold that there is no zakah onwomen's jewelry regardless of its value. Al-Baihaqi relates that Jabir ibn'Abdullah was once asked if jewelry was subject to zakah. He replied that itwas not, even if its value exceeded one thousand dinars.
Al-Baihaqi also narrates the case of Asma': "Asma' bint Abu Bakr usedto adorn her daughters with gold. Although its value was around fifty thousanddinars, she did not pay zakah on it."
It is related in al-Muwatta' from 'Abdurrahman ibn al-Qasim from his fatherthat 'Aishah used to take care of her nieces, who were orphans under herprotection, and adorned them with jewelry without paying its zakah. Also inal-Muwatta' it is related that 'Abdullah ibn 'Umar used to adorn his daughtersand slave girls with gold without paying zakah.
Summing up the subject, al-Khattabi concludes: "What appears in theQur'an supports the view of those who hold that zakah is obligatory on gold andsilver, and the traditions also support this. Those who did not consider itobligatory based their view on speculation and some of the traditions. However,to be on the safe side, it is better to pay." These different views dealwith allowable gold or silver adornment. As for other adornments which areprohibited-- that is, a woman wearing a man's adornment--their zakah should bepaid. The same rule is applied to gold or silver utensils.
Abu Hanifah is of the opinion that there is no zakah on the dowry of a womanuntil she comes to possess it. At the same time, the dowry must constitute thenisab at the end of the year. The position, however, will be different if thewoman has accumulated a nisab other than the dowry. In such a case, any amountshe receives should be added to the nisab, and zakah should be paid at the endof a year of possession. Ash-Shaf'i holds that a woman must pay zakah on herdowry at the end of one year, even if it is before the wedding. The probabilityof its restitution because of nullification, or its fifty percent refundbecause of divorce, does not exempt her from paying it. The Hanbaliyyah are ofthe opinion that dowry is a credit for women and that it is similar to debts.If the recipient of a dowry is rich, the payment of its zakah is obligatory. Ifthe recipient is insolvent, or does not acknowledge it, then, according toal-Khiraqiyy, the zakah is obligatory regardless of the consumation ofmarriage. If a woman receives half of her dowry (in the case of her divorcebefore consumation), she should pay zakah only on the received half. However,if all of the dowry is cancelled before she receives it (in the case ofnullifying the marriage on her behalf), she is under no obligation to pay itszakah.
Abu Hanifah and Malik maintain that the rent is not payable to the landlordat the time of the contract but at the expiry of the renting period. Thus, thelandlord who rents out a house should pay the zakah on his house rent, providedthe fixed amount meets the following conditions: receiving of the money andcompletion of nisab at the end of the year. The Hanbaliyyah think that once thecontract is concluded, the landlord is entitled to have rent. Thus, if someoneleases his house, the zakah is due upon its fixed rate reaching a nisab at theend of the year. This is so because the landlord has the right to spend therent the way he wants to. The possibility of cancelling the lease does notinvalidate the obligation to pay zakah. This case is similar to the case ofdowry before the consumation of a marriage. If the rent is an arrear rent, thenit should be treated as a debt either as paid or postponed. In al-Majmu',an-Nawawi says: "If somebody leased a house and was paid in advance, heshould pay its zakah on receiving it. This is uncontroversial."
The majority of scholars among the companions, the followers, the generationafter them, and the jurists who came subsequently held that zakah onmerchandise is compulsory. Abu Dawud and alBaihaqi relate that Samurah ibnJundub reported: "The Prophet, upon whom be peace, used to command us topay sadaqah from [the goods] we had for sale." Ad-Daraqutni and al-Baihaqirelate that Abu Zharr reported the Prophet, upon whom be peace, saying:"There is sadaqah on camels, sheep, cows, and house furniture."Ash-Shaf'i, Ahmad, Abu 'Ubaid, ad-Daraqutni, al-Baihaqi, and 'Abd ur-Razzaqrelate that Abu 'Amr ibn Hammas reported from his father that he said: "Iused to sell leather and containers. Once, 'Umar ibn al-Khattab passed by meand said: 'Pay the sadaqah due on your property.' I said: 'O Commander of theFaithful, it is just leather.' He replied: 'Evaluate it and then pay its duesadaqah.' "
Commenting on its credentials, Ibn Quadmah says in alMughni that this is akind of story which is well-known and indisputable. This might be a consensusof opinion.
On the other hand, the Zahiriyyah maintain that merchandise is not subjectto zakah. They differ, says Ibn Rushd, because of their use of analogicalreasoning to the obligation of zakah and because of their disagreement on theauthenticity of Samurah's and Abu Zharr's reports.
However, the majority of jurists view merchandise as a property whichincreases in value. Hence, by analogy, it is similar to the three categoriesupon which zakah must be paid: plantations, cattle, and gold and silver.
It is stated in al-Mandr: "Most scholars agree that zakah is obligatoryon merchandise even though there is no clear-cut ruling in the Qur'an or thesunnah on this issue. However, there are a number of reports that corroborateeach other with regard to the evidence provided by [their] texts. Theirrationale is that since merchandise is a form of cash, there is no differencebetween it and dinars or dirhams in terms of which it is valued. This meansthat the form of the nisab can alternate between value in the form of cash andthat which is valued in the form of merchandise. If zakah had not beenobligatory on merchandise, the rich--or most of them --would have convertedtheir cash into merchandise for trading purposes, making sure that the nisab ofgold and silver is never possessed by them for a year."
The main consideration here is that by levying zakah on the rich, Allah theExalted wants to help the poor and to promote the welfare of the people ingeneral. For the rich, its benefit lies in cleansing their persons ofstinginess--both in money and feelings. For the poor, its benefit lies ineasing their circumstances. Zakah thus eliminates the causes of corruptionwhich results from the increase of money in a few hands. It is this wisdomwhich the Qur'an refers to when it deals with the distribution of booty: "...that it becomes not a commodity between the rich among you" (al Hashr 7).Therefore, it is not reasonable to exempt businessmen from their societalobligations when they possess most of the nation's wealth.
The author of al-Mughm states that: "Merchandise can only be consideredas trading goods for two reasons:
-1- The actual possession of merchandise is acquired by an act such as acommercial transaction, marriage, divorce demanded by the wife (khul'),acceptance of a gift, bequest, booty, and other lawful acquisition. This isbecause that which is not subject to zakah cannot be considered as sosubsequent to its possession on the basis of niyyah (intention) only, as, forexample, in the case of fasting. It does not make any difference whether aperson came to possess such items by buying them or not because his possessionis by an act similar to inheritance.
-2- The goods are intended, at the time of possession, for trade. These areconsidered as non-trade goods even though the person intends to use them laterfor trade.
However, if he possesses these goods through inheritance and intends themfor trade, they are not considered as trade goods because the determiningfactor in such cases is the status of acquisition, not the temporary state oftrade. Mere intention will not provide a valid reason to change its status. Forexample, if a person intends to travel without embarking upon it, then the mereexpression of his intention will not constitute the act of traveling. Likewise,if a person bought merchandise for trade and then intended it for possession,it would be considered as such and zakah will not be paid on it.
One who possesses merchandise with a nisab for a year should pay zakah onit, the amount of which is a quarter of a tenth of its value. This should bedone by a businessman every year. However, the period of a year does not comeinto effect unless his inventory constitutes a nisab.
Assuming a businessman possesses merchandise short of a nisab and part of ayear has passed, his inventory subsequently increases through an unusual risein value (because of supply and demand or through price fluctuation) so that itconstitutes a nisab; or he sold merchandise for the price of a nisab; or duringthe course of the year he comes to possess other merchandise which, togetherwith his previous amount, completes a nisab; then, the hawl (for the purpose ofzakah) starts at that time, and the time elapsed is not taken intoconsideration. This is the view of the Hanafiyyah, ath-Thauri, ashShaf'i,Ishaq, Abu 'Ubaid, Abu Thaur, and Ibn al-Munzhir.
According to Abu Hanifah, if the merchandise in possession constitutes anisab at the beginning of the year and also at the end, zakah will still beapplicable even though the nisab might have decreased within that time. Thereason is that it is difficult to ascertain its completeness in the interveningperiod.
The Hanbaliyyah hold that if the merchandise decreases during the course ofthe year and increases again until it constitutes a nisab, the (requisite)period of a year starts all over again because it has been interrupted in itscourse by the decrease.