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(Gold) 87.48g equating to NPR. 661031.2476
(Silver) 612.36g equating to NPR. 51579.0828
The literal meaning of Zakat is “to purify, to grow, and to increase.” It is an obligatory act of charity ordained by Allah, Subhanahu Wa Ta’ala (The Glorified and Exalted), to be performed by every Muslim who possesses a certain minimum amount of wealth/assets (called Nisab) for a complete Hijri lunar year cycle (called Hawl). It is an act of worship (ibadah) and not a tax. Zakat is owed on specific assets only, identified by Islamic Law as assets having the potential for growth, called “Zakatable Assets.” Zakat is the compulsory transfer of ownership of a portion of the wealth of the giver, calculated at the rate of 2.5%, to poor and deserving Muslims who qualify to receive Zakat according to Islamic Law. Zakat is calculated on the total market value of all Zakatable Assets after deducting all Zakatable Liabilities.
Assets which have the potential to grow are Zakatable Assets. Assets on which Zakat was due during the early Islamic Era and are still applicable include: gold, silver, business merchandise inventory, livestock, agricultural produce, buried precious metals or minerals (rikaz), profits from investments, accounts receivable, real estate business investment inventory (acquired for gain).
Assets on which Zakat is due today which were not prevalent in the past include: cash, cryptocurrencies, stocks, mutual funds, stock options, employee stock purchase plan, private companies, corporations and partnerships, retirement and education plans (401K, IRA, 529 etc.), real estate business investments in property owning companies, trusts, lump sum payments in terms of compulsory pension and provident funds, severance packages, income-tax refund.
Any liabilities on Zakatable Assets are called Zakatable Liabilities, and one should deduct their value from their total Zakatable Assets. For example, the amount owed for acquired gold or silver jewelry, or borrowed money which you have to return are both examples of Zakatable Liabilities.
Any possessions that are not of productive nature, even if they exceed one’s needs are Non-Zakatable - provided they are not intended for business gain/profit. This can include such assets as: cars, utensils, furniture, homes not used for business purposes (such as a house one lives in, etc). Lastly, if one’s total Zakatable Assets are below the value of Nisab, all their assets will be Non-Zakatable.
Liabilities due on Non-Zakatable Assets are called Non-Zakatable Liabilities. Non-Zakatable Liabilities can not be deducted from Zakatable Assets. Examples of Non-Zakatable Liabilities include: a loan on the house one lives in, a loan on a car one uses for transportation, liabilities which one must pay back, etc. Because one does not pay Zakat on the house they live in, or the car they drive - then they can not deduct the money owed on such things from their total Zakatable Assets.
The passing of one full lunar year cycle under the Hijri calendar is called Hawl.
The minimum amount of Zakatable Assets which makes one liable to pay Zakat is called Nisab. In other words, any person who possesses this minimum amount of assets, or Nisab, for one Hijri lunar year cycle (hawl) is obligated to pay Zakat. Similarly, if one does not have Nisab in their possession for the entire Hijri lunar year cycle, even if for just one day - they do not have to pay Zakat and are actually eligible to receive Zakat. Nisab is nothing but a yardstick to find out who should pay Zakat and who should not. It has no effect in calculating a person’s Zakat.
According to hadith, Nisab can be according to the value of 20 dinar/20 mithqal of gold ~ (87.49 grams), or 200 dirhams/5 awaq of silver ~ (613.35 grams).
| Nisab | Grams | Ounce | Troy oz. | |
|---|---|---|---|---|
| Gold | 20 dinar/20 mithqal | 87.48 | 3.086 | 2.8125 |
| Silver | 200 dirham/5 awaq | 612.36 | 21.635 | 19.6875 |