1. Cash in Hand & Bank Accounts
Physical notes, checking & savings accounts, foreign currency, digital wallets
2. Gold & Silver Holdings
Jewelry, coins, bullion (weight in grams or tolas, karats 24k/22k/21k/18k)
3. Shares, Stocks & Liquid Investments
Day-trading stocks, mutual funds, cryptocurrency, accessible pension amounts
4. Business Inventory & Merchandise
Stock held for resale (at wholesale replacement cost) & trade receivables
5. Money Owed to You (Receivables)
Personal loans given with expected repayment and security deposits
6. Deductible Short-Term Liabilities
Immediate debts, overdue bills, unpaid salaries, pending supplier dues
Zakat Statement
إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاءِ وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ اللَّهِ وَابْنِ السَّبِيلِ ۖ فَرِيضَةً مِّنَ اللَّهِ ۗ وَاللَّهُ عَلِيمٌ حَكِيمٌ
"Zakat expenditures are only for the poor and for the needy and for those employed to collect [zakat] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler - an obligation [imposed] by Allah. And Allah is Knowing and Wise."
The 8 Quranic Categories of Zakat Recipients (Asnaf)
Unlike voluntary charity (Sadaqah) which may be given to anyone, Zakat is exclusively restricted by divine revelation to these eight specific categories.
1. Al-Fuqara (The Extreme Poor)
Individuals who possess no wealth or have wealth below half of the Nisab threshold, unable to meet basic biological survival necessities.
2. Al-Masakin (The Destitute / Needy)
Those who have some income or work, but whose total earnings fall short of their essential cost of living, leaving them in persistent deficit.
3. Al-Amilina 'Alayha (Administrators)
The trustworthy appointed staff and auditors tasked with collecting, cataloging, securing, and disbursing Zakat to eligible recipients.
4. Al-Mu'allafati Qulubuhum
New Muslim converts who experience financial boycott, displacement, or social ostracization, or those whose hearts are softened toward Islam.
5. Fir-Riqab (Freeing Captives)
Historically used to manumit slaves. In modern jurisprudence, applied to liberating modern victims of human trafficking, bonded labor, and unlawful detention.
6. Al-Gharimin (The Debt-Stricken)
Individuals overwhelmed by legitimate debts incurred for survival, medical crises, or disaster recovery, with zero realistic ability to repay.
7. Fi Sabilillah (In Allah's Cause)
Those dedicated to the legitimate defense of Muslim lands, the propagation of sacred Islamic knowledge, and frontline humanitarian struggle.
8. Ibnus-Sabil (The Stranded Wayfarer)
Travelers or refugees cut off from their funds or resources while away from home, even if they hold substantial assets in their homeland.
⛔ Who CANNOT Receive Your Zakat
- • Direct Ascendants: Parents, grandparents, great-grandparents (you are already obligated to maintain them).
- • Direct Descendants: Children, grandchildren, great-grandchildren.
- • Spouse: A husband cannot give Zakat to his wife, as he is legally bound to provide her maintenance.
- • The Wealthy: Anyone possessing net wealth at or above the Nisab threshold.
- • The Prophet's Family: Descendants of Banu Hashim.
- • Public Works: Bridges, mosques, generic civil infrastructure (use Sadaqah Jariyah instead).
⏱️ The Hawl (1 Complete Lunar Year) Rule
- • Anniversary Date: Zakat is calculated once your net wealth has exceeded Nisab and remained above it for 354 lunar days.
- • Mid-Year Fluctuations: In Sunni consensus (Hanafi, Hanbali), you do not track day-to-day transactions; you evaluate the net qualifying balance on your annual Zakat due date.
- • Advance Payments: Permissible in Islamic law. If you gave money during the year for emergency appeals, deduct it from your final Hawl statement.
- • Ramadan Tradition: Muslims frequently designate Ramadan as their annual Zakat milestone for maximum divine reward.
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Frequently Asked Questions
Authentic fiqh answers on modern investments, personal jewelry, debts, and Nisab criteria.
1. Fully accessible accounts: If you are permitted to withdraw funds at will (e.g. Traditional/Roth IRA, withdrawable 401k), Zakat is due on the net accessible amount—the total balance minus early withdrawal penalties and estimated tax.
2. Locked pension schemes: If your employer or law strictly locks the funds until retirement age with no access, no Zakat is due during lockup. When you receive payout, you pay 2.5% upon receipt.
• Hanafi Madhhab: Zakat is obligatory on ALL gold and silver, whether worn regularly, stored as bullion, or gifted, once it meets Nisab.
• Shafi'i, Maliki, Hanbali: Customary jewelry worn for personal daily use is exempt as personal apparel. Any excess kept for savings or investment is zakatable.
To err on the side of caution and generosity, many scholars encourage calculating Zakat on all gold jewelry.