All Things Zakat: From Stocks to Livestock

Estimated read time: 1:20

Summary

In this enlightening session by Imam Tahir Anwar from Zaytuna College in Berkeley, California, the complexities and nuances of zakat—an important Islamic practice—are discussed. Zakat, essentially a charitable obligation, involves the purification and increase of wealth and is mandatory for Muslims who meet certain criteria. The talk delves into the specifics of zakat on modern assets like stocks, retirement funds, and livestock, outlining the different methods of calculation and emphasizing intentions in giving. Imam Anwar also addresses common questions regarding zakat on loans, 401Ks, jewelry, and more, aiming to clarify misconceptions within the community.

Highlights

Imam Tahir Anwar explains zakat's dual meanings: purity and increase, reflecting its spiritual and economic dimensions. 🌱
The obligation of zakat is tied to specific cultural and economic conditions, such as possessing the nisab for a lunar year. 🌙
Detailed guidance on modern concerns like stocks and 401k funds is provided, helping Muslims navigate financial complexities in line with religious obligations. 📈
The importance of intentions in zakat distribution emphasizes sincerity and purpose in charitable acts. 👐
Common community questions, especially around asset calculation and loan management, are addressed to demystify zakat. 🔍

Key Takeaways

Zakat is a crucial form of charity in Islam, purifying wealth through mandatory giving. 💰
Five conditions must be met for zakat to be obligatory: being Muslim, free, mature, sane, and possessing the nisab (minimum wealth). 🕌
Zakat involves both traditional and contemporary assets, including stocks, cash, and livestock. 📊
It’s essential to calculate zakat annually, based on either gold or silver value, and not just estimate. 📆
Giving to family, local community, and confirmed zakat-eligible recipients is encouraged. 👨‍👩‍👧‍👦

Overview

Imam Tahir Anwar of Zaytuna College offers an in-depth exploration of zakat, a pivotal Islamic duty that underscores both spiritual purification and economic redistribution. Taking listeners through the intricacies of zakat, he highlights its dual essence—purity and increase—drawing a vivid connection to its implications in modern-day economic contexts.

This session provides clarity on how zakat relates to contemporary assets such as stocks, cash savings, and retirement plans. The lecture demystifies the calculation process, urging Muslims to make informed decisions based on the current value of gold or silver. Emphasizing the need for precise calculation, Imam Anwar advises against guesswork in fulfilling this religious obligation.

Addressing frequent queries, Imam Anwar elucidates on practical issues like loan repayments, the role of intentions in charity, and the permissible allocation of zakat. He advocates for community-oriented giving, stressing the significance of aiding local zakat-eligible individuals and institutions, which ensures that charity begins at home and strengthens communal bonds.

Chapters

00:00 - 01:00: Introduction and Opening Remarks The chapter begins with a religious invocation, stating the speaker's faith and reverence towards Allah and Prophet Muhammad. The introduction and opening remarks establish the spiritual tone of the discussion, emphasizing gratitude and reverence.
01:00 - 03:30: Understanding the Concept of Zakat The chapter begins with a praise to Allah, asking for His help, protection, mercy, blessings, and sustenance. It highlights the importance of being successful both in this life and the hereafter. The speaker, Imam Tah Anar, broadcasts live from Zetuna College, setting the stage for a deeper discussion on the concept of Zakat.
03:30 - 06:00: Explanation of Zakat Obligations and Conditions The chapter begins with an introduction by a faculty member from Berkeley, California, who expresses honor in being part of the college. The session is titled 'All Things Zakat: From Stocks to Livestock,' but the speaker notes uncertainty about discussing 'livestock' specifically. The focus will be on discussing 'stocks' in the context of zakat obligations.
06:00 - 09:00: The Concept of Nisab The chapter introduces the concept of Nisab in the context of zakat, focusing primarily on the issues that are not commonly encountered in the Western World, such as dealing with livestock. The discussion is based on a Hani text that is traditionally taught, and it is also part of the curriculum for the freshman class at Zetuna College.
09:00 - 12:00: Calculation of Zakat Based on Nisab This chapter discusses the concept and calculation of Zakat based on Nisab. It begins by explaining the literal meaning of the term 'Zakat,' highlighting its roots in purity. The Quranic reference instructing the taking of a portion of wealth to purify the rest is also mentioned. The focus is on understanding how Zakat purifies wealth and the guidelines provided for its calculation, emphasizing its significance in Islamic financial ethics.
12:00 - 14:00: Allocation and Intention in Giving Zakat This chapter discusses 'Allocation and Intention in Giving Zakat.' It begins with the dual meanings of zakah: purification and growth/increase. The term is further explained with a reference from the Arabic language, where it is used to denote the growth of plants.
14:00 - 17:00: Assets Requiring Zakat This chapter discusses the concept of 'Assets Requiring Zakat' in Islamic law. It delves into the literal meanings of the word 'zaka' or 'zakah', which signify increase and growth in size or amount. The chapter explains that, in Islamic law, zakah is the ownership of a specified amount of wealth. Once an individual owns this amount, they become liable to pay zakah according to Islamic regulations.
17:00 - 20:00: Calculating Nisab Value in Gold and Silver The chapter discusses the concept of zakah, an obligation for Muslims who meet certain criteria. It touches upon the wealth redistribution system in Islam, focusing on the necessity for Muslims to assist those in need. The conditions to be met for zakah to be obligatory are briefly introduced, with the promise of further discussion on these rules and laws in subsequent sections.
20:00 - 23:00: Disparity between Gold and Silver Nisab The chapter discusses the conditions under which an individual is obligated to give Zakat (a form of almsgiving in Islam). One condition is that the person must be free, implying that slaves or those who do not have autonomy over their wealth are not required to give Zakat. Additionally, the individual must be mature, indicating that minors, regardless of their wealth, are not obligated to pay Zakat.
23:00 - 30:00: Determining Zakat After One Year The chapter titled 'Determining Zakat After One Year' explains several conditions under which Zakat, the obligatory form of charity in Islam, is not required. A notable scenario includes wealth belonging to a child, where neither the child nor the parents are obligated to pay Zakat on the child's wealth, regardless of the amount. Additionally, sanity is highlighted as a requirement for one to be obligated to pay Zakat, implying the individual must have the intellectual capacity to comprehend and fulfill this religious duty.
30:00 - 38:00: The Misunderstanding of Annual Zakat Calculation The chapter titled 'The Misunderstanding of Annual Zakat Calculation' addresses the differing Islamic jurisprudence perspectives on the obligation of paying zakat, particularly in regard to individuals who are not of sound mind. According to most Islamic scholars like Imam Shafi, Imam Malik, and Imam Ahmed, the guardians of an individual who is not sane are responsible for paying zakat on that person's wealth. However, Imam Abu Hanifa holds the view that sanity is a necessary condition for the obligation of zakat, and if this condition is not met, zakat is not required to be paid.
38:00 - 45:00: Importance of Accurate Zakat Calculation The chapter emphasizes the importance of accurately calculating zakat, a form of almsgiving in Islam. It introduces the concept of 'nisab,' which is defined as the minimum amount of wealth a person must possess before they are obligated to pay zakat. The transcript explains that owning nisab for a complete lunar year makes one eligible for zakat payment.
45:00 - 52:00: Recipients of Zakat The chapter discusses the recipients of Zakat, focusing on the conditions under which a person is obliged to pay Zakat. It explains that a person must own a certain minimum amount of wealth for one complete lunar year to be required to pay Zakat. If one owns less than this amount, they are not obligated to pay.
52:00 - 61:00: Common Zakat Questions and Clarifications The chapter discusses the eligibility for receiving Zakat, focusing on individuals whose wealth is below the Nisab threshold, making them eligible to receive Zakat. However, it also highlights the personal choice of some eligible individuals who prefer not to accept Zakat and instead live modestly on their own earnings, even when legally entitled to receive it.
61:00 - 59:00: Conclusion and Invitation for Further Engagement The chapter discusses the important aspects of giving Zakah (a form of almsgiving in Islam). It emphasizes that when giving Zakah, the intention of the giver is crucial. The giver must intend for the donation to be Zakah at the time of giving. Moreover, it clarifies that the recipient does not need to be informed that the aid they receive is Zakah. However, it is the responsibility of the giver to ensure that the recipient is eligible to receive Zakah.

All Things Zakat: From Stocks to Livestock Transcription

00:00 - 00:30 I begin in the name of Allah most gracious most merciful I bear witness that there's none worthy of worship except Allah and that his beloved NE and Prophet Muhammad sallallahu alaihi wasallam peace and blessings of Allah be
00:30 - 01:00 upon him as his last and final messenger We Begin by praising Allah subhanahu wa'ta'ala asking Allah subhanahu wa ta'ala for his help his protection his Mercy His blessings his sustenance and praying and begging Allah subhanahu wa ta'ala to make us amongst the most successful individuals both in this life and the Hereafter brothers and sisters once again this is your brother Imam tah Anar coming to you live from zetuna college
01:00 - 01:30 in Berkeley California I am honored to be a faculty member at the college and um inshallah in the next few moments that we have together uh we'll be going through this session that has been um titled or very beautifully titled all things zakat from stocks to livestock now to be honest with you inshallah we will be discussing stocks I'm not sure if we will be discussing livestock uh this afternoon
01:30 - 02:00 as most people in the Western World don't have to deal with livestock when it comes to zakat issues um inshallah the the text that I'll be following for a portion of this uh presentation this evening is a primarily Hani text um that is generally taught and it's a text that I teach here to the students the freshman class uh at zetuna college
02:00 - 02:30 um zakah what is zakah zakah literally has two meanings uh first of all Purity Allah subhanahu waala mentions in the Quran Allah subhanahu waala says take from their wealth s take from their wealth a portion of wealth that you may purify
02:30 - 03:00 you may purify and that you may sanctify them so the first meaning of zakah is purification the second meaning literal meaning of zakah is z z increase and that's why in the Arabic language there's a term that's used right that um the plants have grown
03:00 - 03:30 the plants have increased in other words that they have become larger they have become bigger and so that these two are literal meanings of of the word zaka um zakah in Islamic terminology According to Islamic law is the ownership of a certain amount of wealth right ownership uh is a certain amount of of a certain amount of wealth by by law which Islam says that now you are become you have
03:30 - 04:00 become wealthy and to take that wealth and pass it along to those that happen to be um in need as far as and then there are certain rules and laws around this and we'll slowly be discussing those in the next few moments that we have um zakah is obligatory upon an individual who fulfills five conditions in other words if you don't fulfill any of these conditions zakah is not an obligation on you first of all you must be a Muslim a Muslim is require ired to give zaka so
04:00 - 04:30 that's the first condition the second is that a person must be free if you are a free individual you're not a slave you're not bound in in that case you are obligated to give zaka in other words you have a right on your own wealth and you have the ability to exercise whatever change you want in your own wealth um thirdly you must be mature in other words if you have if a young child uh under the age of puberty has an amount of wealth and it could be in the hundreds of thousand thousands or the
04:30 - 05:00 millions of dollars as long as it belongs to a child that child is not obligated to pay zaka nor is the parent obligated to pay zakah on the wealth for that child if if as long as that money belongs to that child and it doesn't belong to the adult number four sanity uh an individual must be sane uh must be uh must have the intellect intellectual capacity in order to ensure that that person can pay uh zakah um according to
05:00 - 05:30 Other M such as according to IM IM shaf or IM Malik according to IM Ahmed as well that if a person is not sane then that person's guardians or the people that look after that individual must pay the zaka on behalf of that individual's wealth according to IM abif uh sanity is a condition condition and if that condition is not fulfilled one is not required to pay zaka and and uh last but
05:30 - 06:00 not least uh one must be uh in possession of nisab nisab we will translate here as a minimum amount of wealth right so what is nisab nisab is a portion of wealth a minimum amount that a person owns that requires for that person to pay zakah if a person possesses this nisab this minimum amount for a complete lunar year
06:00 - 06:30 then the poor now owns this portion and the owner is obliged to pay that zaka so that's what theab is in other words you have to be Malik the owner of the owner of a certain amount of minimum wealth which obligate in other words if you have that much wealth and you've had it for one complete lunar year you are now required to pay zakah and if you have less than that amount less than the
06:30 - 07:00 minimum amount less than the nisab then in that specific case you are allowed to receive zaka if you wish to take and a lot of people despite being individuals who are legal recipients of zakah may decide or may choose not to take zakah and rather live on whatever little uh income that they make with their own hands um and not want to take someone else's zaka despite the fact that it's completely permissible for them to do so
07:00 - 07:30 so one of the things that I want to mention is that when we give zakah zakah must be intended zakah must be intended when that wealth is given now when an individual gives zakah the recipient does not need to know that this is zakah though though it is an obligation on The Giver to ensure that the recipient is one who can receive zaka who who has a
07:30 - 08:00 lot of times uh it's a very very common question you you know an email or a phone call that says my cousin my relative my friend a family member so and so happens to you know is going through a certain situation are they eligible to receive zaka that's a very common question the simplest answer is that if they have the nisab the minimum amount they are not um it's not permissible for them to receive zakah and if they have below the nisab then
08:00 - 08:30 it's permissible for them to receive zaka but at the same time one thing that we should keep in mind is that when we give zakah it must be intended in other words if an individual gave an x amount because zakah is something that can be given in advance as well once you know you as long as you make the intention so for example Ramadan is about to begin inshallah very soon may Allah make this month a blessed one for all of us but as the month of Ramadan begins say in the last few weeks or say between now and tomorrow or between now and
08:30 - 09:00 whenever you calculate your zaka someone um comes to you and says um you know there's a cause there's an individual who is zakah eligible um and would you like to give some zakah to this individual and say you give um $100 or $10 or whatever it is that you choose to give um although you haven't calculated because most Muslims do calculate in the month of Ramadan though you haven't actually calculated um you know how much zakat you need to give this year
09:00 - 09:30 but when you do give even if it's giving in advance the intention must be made in other words if an individual gave an x amount of dollars last week and then next week decides to calculate and say well now I've calculated that I need to pay $500 in zakah but last week I gave 200 I'm going to count that towards my zakah it would not be permissible the intention must be there when giving zakah either on time either delayed or even Advanced because
09:30 - 10:00 giving ADV giving zakah before it's actually due is permissible but the intention must be there if the intention is not there you can't go back in hindsight and say that was my zaka or I'm going to calculate that amount that I gave towards my zaka is very common very common question um there's a number of things that an individual needs to give zakah on um of course um your assets so
10:00 - 10:30 basically when we refer to um assets we are referring to things such as um cash whether it's in your hand or in the bank or wherever else it is um stocks uh gold and silver um retirement plans and there's a number of plans we'll come to that in a moment that fall into that category uh loans and advances if you've given anyone a loan you must pay zaka on that as well um business inventory if an individual runs run a business you have
10:30 - 11:00 a restaurant or you have a store and you sell shoes um or whatever it is that you sell if you have any inventory that belongs to you then zaka must be paid on that as well and um livestock of course as our title today uh reminds us from stocks to livestock livestock is something that um zaka needs to be given on as well and there's a set of rules around that um maybe what we can do now is discuss the actual uh nisab so what is
11:00 - 11:30 nisab or how do you calculate the value of nisab um according to sh According to Islamic law we are required to calculate the nisab based on a specific amount of gold or silver as taught to us by the messenger Muhammad sallallahu alaihi wasallam peace and blessings of Allah be
11:30 - 12:00 upon him so as long as an individual has either an x amount of gold or its value it doesn't have to be specifically gold it could be the value in the form of any assets as I mentioned earlier business inventory stocks cash assets jewelry as long as um you reach that nisab based on a specific amount of gold that the prophet Alat wasam has prescribed or silver um and you can use either to calculate
12:00 - 12:30 and you know for those of us that might not have calculated may not know what I mean but I'll explain that in in in a moment so zakah is calculated based on the current value of gold and silver in other words not based on the value of what you might have purchased at purchased it at if you are actually um calculating your gold and silver some 5 10 15 years ago it's on the current market value you can either use silver
12:30 - 13:00 or gold to determine the value of nisab um but also keep in mind that the value of silver will be far less than the value of gold that's why the the the scholars of the tradition of the opinion that in in terms of determining whether or not you should give zakah use the lower threshold right which is the nisab according to Silver and in determining
13:00 - 13:30 whether you should or you can receive zakah use the higher threshold which is the threshold or the nisab of gold so that more people would benefit from the zakah um let's take let's take uh silver um before we discuss um gold or actually let's do it the other way around gold before we do silver um as far as gold um you know the the isab according to gold is 87 gr okay there's
13:30 - 14:00 there's a lot more that goes into this but very simply put it's actually um 87 G if an individual has the equivalent of assets that are worth 87 grams of gold or more and they've had it for one complete lunar year then in that specific case that individual is liable is obligated to give zakah so 8 7 G
14:00 - 14:30 today's value of gold is close to um $38 um a gram right $38 a gram and that brings you to $336 so again it's all based on the value of gold that's the way it's determined I have a a a file in front of me that one of my in fact the the first first year atuna college students who have now graduated uh this young student prepared a file for me and um in in on
14:30 - 15:00 June 27th 2012 so about 3 years ago um the value or the nisab was $4,840 but because the value of gold has dropped in today's uh in according to the according to the value of gold today 87 G time $38 is $336 which basically means if you have $3,300 worth of assets or more and you've had them for one lunar year you
15:00 - 15:30 are obligated to give zakah or if you have less than the nisab less than $3,300 you are eligible to receive zaka it is permissible for you to take zaka um so always remember 87 grams of gold is the nisab the current market value of gold grams you can go to goldprice.org and always get the value of that and you would be able to figure that out as far as
15:30 - 16:00 silver silver is calculated again according to sh there's a number of um myal and based on that but essentially for our purposes it's 24 o of silver right 24 ounces of silver according to today's market um $16 an ounce okay $16 an ounce so 24 time um 16 brings us to
16:00 - 16:30 $384 so if one were to be calculating theab the minimum amount the threshold based on Silver then as long as you have $384 worth of assets you must pay zaka and if you have less than $384 then you must then you are eligible to receive zakah I hope I've made that
16:30 - 17:00 clear now now I I'll mention something I mentioned a few moments ago there is a disparity between the numbers there's an amazing disparity a lot and most people in the west probably it really doesn't matter but there's a lot of people in the world that actually fall between these two numbers they have their wealth their total wealth Falls between $384 and $3,300 so the question now is the people that fall in between do they give zaka
17:00 - 17:30 or do they receive zaka and there's a number of individuals in the world that fall between that those two numbers the question is can they receive zaka or do they not receive zaka so that's the golden rule that I mentioned earlier that in determining whether you should give zakah or not the are of the opinion that use the lower threshold the the threshold the nisab according to Silver so more people would give all those that fall between 384 and $3,300 would also
17:30 - 18:00 become givers right so more people would give zaka and as far and this is this is not a general rule per se this is what the this is what the scholars um they give an opinion based on tawa although technically if someone chose to not give zakah that would be fine as well and in terms of receiving zakah the are of the opinion that you should use the higher threshold that of gold so that more people would um would benefit um in terms of uh re receiving
18:00 - 18:30 zakah so that's the nisab in a nutshell one of the things that we've been mentioning time and again is that passing of one year okay the passing of one year one lunar year a lot of people generally misunderstand this it's one lunar year from the time your wealth reached the nisab okay not one lunar year based on
18:30 - 19:00 when you made that money or not so one thing that we should clarify and maybe um you know Muslims in America May identify this more than others but in the United States we pay taxes based on our annual income as it is in most parts of the world you pay taxes based on your annual income in in Islam we pay zakah based on our annual savings we don't pay based on our annual income you could be making a million dollars you could be making a few million dollars but at the end of the Lun lunar year depending on
19:00 - 19:30 what you have left is what you would pay your zaka on not necessarily on what you made all year in other words if someone um liquidated all their assets or spent it all up or did whatever it is that they wanted to they could have made a few million during the course of the year but at the end of the lunar year they have absolutely nothing left in that specific case they have no zaka that they need to pay but one thing that
19:30 - 20:00 I do want to clarify that I was about to say a few moments ago is that your lunar year is calculated from the time that you became the owner of nisab became the owner of that threshold became the owner of that minimum amount in other words let's argue and say that we are going to take the silver as our minimum amount because we want to be amongst those who give so you happen to
20:00 - 20:30 be a student you have absolutely no money all the money that you do have is your parents money that you're using and so on and so forth or whatever it is and all of a sudden you go to work you went to work and you made an x amount of dollars the moment you made that money and let's just argue for a moment and say that your first paycheck was $800 right at that point in time you became the owner of nisab right you became the owner of that amount which is
20:30 - 21:00 the minimum amount the threshold you've you've surpassed the threshold that's when you become the owner of nisab your year that's when your lunar year begins one year from that day if you have any amount of wealth that happens to be above the threshold above the nisab you will give your zaka now what that basically means is let's argue and say that last year on the first of Ramadan I was the owner of
21:00 - 21:30 nisab right I was the owner of nisab Fast Forward almost one year on the 15th of shaan 15 days 14 days before Ramadan I was I had a business or I was working and I got a Bonus and someone put $50,000 into my account which belongs to me however I made it it's now $50,000 that I now have whether it be in the form of cash
21:30 - 22:00 savings jewelry stocks whatever it may be but it's $50,000 I now own come the first of Ramadan the question is and this is a very common question do I pay zakah on that 50,000 that I just made two weeks ago or not and a lot of people misunderstand this and say well I've only had this amount of wealth the 50,000 for two weeks and it's not an
22:00 - 22:30 entire year because it's not an entire year I don't have to pay zakah on it wrong right you as long as you become the owner of nisab on the first of Ramadan last year then fast forward one year on the first of Ramadan the next year whatever amount of wealth you have whether that wealth was with that entire amount of wealth was with you for one year or not as long as you were above the nisab at the beginning of the year
22:30 - 23:00 and above the nisab at the beginning of the next year you will pay zaka on whatever you have in terms of assets on that day otherwise otherwise the problem then would be that you would have to be calculating zakah every single day and say well last year on this day I only had this much last year on this day I only had this much last year on this day I only had this much and we'd have a different amount every day so as long let's understand this correctly as long as happen to be at the be at the beginning of the year above the nisab
23:00 - 23:30 and at the beginning of the next year above the nisab whatever amount you have whatever assets you have that you have access to you will pay zaka on that even if you know even if you haven't had that large amount for an entire year you've been you've had the nisab for an entire year and you must pay zaka on it so there's there's a lot more laws and and I'm going to speak about a few more things before I continue um with with questions but one thing I want to
23:30 - 24:00 mention and hopefully if if you have time I would urge you to go online and um type in the inner dimensions of zakah if you go to Google and type in inner dimensions of zakah and read the few points that IM has authored on this you know in Islam we're encouraged to give though one very important thing with zaka is that we must calculate a lot of times people just rent randomly give and said just say this is a few hundred a few
24:00 - 24:30 thousand and this is my zaka and feel that they've um you know they've they've fulfilled their obligation of giving zakah just by just by having given zakah whenever they wanted to one must at the end of that lunar year sit down and calculate all their assets and at that point in time find out how much zakah they need to give the amount of zakah one needs to give is 2 and a half% right so divide it by 40 which is the
24:30 - 25:00 easiest way or get your calculators and figure out the 2 and a half% and that's what you need to give but one must calculate and know exactly what they need to give in terms of their zaka you can't randomly just write a few checks and say this is my zaka without ever having calculated it yet at the same time one must calculate and the are of the opinion that give a little more uh give a little more than what you really need to inshallah and as IM IM mentions
25:00 - 25:30 that the more you give in the path of Allah subhanahu wa taala the more Allah subhanahu wa taala would give back to you in return think of Zak see zakah zakah means um Purity as I mentioned earlier in other words that wealth that 2 and a half% upon zaka becoming an obligation on you is no longer yours does no longer belongs to us that is someone else's H and that is someone else's right and if we don't take that portion away
25:30 - 26:00 from our wealth that's Haram for us that's Haram wealth touching our wealth Haram for us Halal for someone else how do we expect Baraka in our wealth in our Assets in whatever we have when there's Haram that's part of it right when it doesn't belong to us to begin with Islam says that is no longer yours that must be taken and be given away to those that are uh valid re recipients and when we do give in the path of Allah subhanahu
26:00 - 26:30 wa'ta'ala Allah subhanahu wa'ta'ala protects us our families our jobs our institutions and and Allah subhanahu wa'ta'ala continues to bless us with more and more and more so zakah should be gazali mentions and these are lengthy topics but very briefly zakah mentions that Imam gazali mentions that zakah should be given at its proper time in other words when the lunar year is up one should give it most people do calculate their zakah in Ramadan and and then they give it um give it in secret
26:30 - 27:00 give it quietly give it in the open give it so that people can see that you're giving and hopefully Inspire others to give um if you're going to give to someone who happens to be poor be humble avoid taunting others avoid hurting others in fact the the the opinion the predominant opinion of the is that um the the recipient of zaka can be a relative in fact giving to a relative is more praiseworthy is of more reward than giving to someone who's not a relative
27:00 - 27:30 um also the recipient does not need to know that it's zaka the recipient doesn't you could give it to them however it is as a gift or however and uh they don't need to know that it's a zakah um if if you are if you're amongst the givers the mentioned that give your best right give the best that you can don't don't look at the cheap now in in in most of our cases we actually give cash and hard money but in certain cases people actually gave gold and so on and so forth but the mentioned that um give
27:30 - 28:00 your best and um seek the worthy and deserving seek the worthy and deserving that's why um in in the hanfi school one of the opinions is that the actual the the recipient must become the owner right there there has to be Tam that's a condition in the hanafi school that when you give your zaka if you have an x amount of dollars or whatever it is say you have $100 you must take that hundred and make someone else the owner of that only then
28:00 - 28:30 is your zakah fulfilled and if you don't make someone the owner then your zakah is not fulfilled and so that's one so you know seek those that are worthy and deserving that's why in the hanfi school um giving zakah to institutions who may utilize those funds for their institution building is actually not permissible the predominant opinion and in the case of Institutions that are educational
28:30 - 29:00 institutions we can and should give our zaka to institutions because those institutions will then in turn take that money and utilize it for their students who happen to be needy right who happen to be recipients of zaka but there is an opinion that simply Masjid building or Works where that the the general population benefits from one zaka that would not be permissible it has to be specific spefic now as far as as um the
29:00 - 29:30 recipients and I'm going to come to your questions in a few moments inallah as soon as I'm done with this there are a number of types of recipients that can that zaka can be given to and and the Quran mentions this in Allah subhanahu wa tala says the first individual the first recipient happens to be a an individual who POS possesses wealth but is below the nisab
29:30 - 30:00 the are those that are extremely destitute helpless uh they don't own anything in other words they don't even own a basic amount of of minimum wealth um they are of a lower category than the the first category as far as the the third category are those individuals who are employed to collect zakah um the predom dominent opinion again here is that only if that
30:00 - 30:30 appointment is by the head of the Islamic State if that appointment happens to be by an employer by just any nonprofit employer um there are opinions of the that that would not fulfill that category those hearts who has who those people whose Hearts have been recently reconciled new Muslims to Islam and to bring them closer to
30:30 - 31:00 Islam that's another category slaves purchasing their freedom a slave who has made an agreement with their master and says if I pay you an x amount of dollars then you can be freed um that that slave can be given the those who are in debt extreme debt people who happen to be in debt can be given zakah and striving in the path of Allah subhanahu wa taala this is a category and and the traveler that's the last category but I briefly want to speak
31:00 - 31:30 about this um in the west nowadays Every Act Every Act of good Muslim Deeds is considered to be and people say well the Masjid falls into this service falls into this service falls into the predominant opinion is uh here is that those individuals who are physically fighting in the path of Allah subhanahu wa taala
31:30 - 32:00 those are individuals who can become recipients of that otherwise the category as understood today is generally not what has been understood for generations and traditionally But ultimately um you know we we ask everyone to ensure that they consult with their imams and their sh and ensure that they give their zakah based on uh whatever categories they are most um comfortable with I think what we're going to do is we're
32:00 - 32:30 going to segue into we don't have a lot of time left we're going to segue into certain questions um I I want to I want to thank I'd like to thank those individuals who proactively ensured that they um sent in their questions well in advance there's a number of individuals who actually sent in their questions and um we're going to try to get through those uh the the most common question that we get are those around
32:30 - 33:00 401ks right 401ks um shares stocks that people end up having um there are multiple opinions available so the question is is zakah due on your 401k people are a little confused around this issue there are although there are number of opinions there are three primary opinions on the case of giving zakah on your 401ks number
33:00 - 33:30 one pay zakah on the total value of the 401K the day you're doing your calculations so first of Ramadan third of Ramadan I'm doing my calculations whatever the value is of your 401k on that day including the employer match that has vested so whatever portion belongs to you on that day you will take that amount say your 401k your IRA your um retirement account account is at $150,000 you calculate zaka based on
33:30 - 34:00 $150,000 and you take 25% of that and you give it the second opinion is that you pay zaka annually again annually this is very similar to the first one um on the amount that you have minus any penalties and taxes that you would have to pay if you with through that money so say your 401k is worth $150,000 and your um if you were to cash
34:00 - 34:30 out that 401k on that specific day then whatever penalties you would have to pay you would deduct that whatever taxes you would have to pay based on your tax bracket you would deduct that and let's just argue and say that you were left with $15,000 you would pay zakah on $115,000 that's the second opinion the third opinion is that you pay zakah on your 401k at the time of retirement in other words whenever you actually get you have access to that entire 401K at the age of
34:30 - 35:00 60 61 when you have access to that you would pay zakah on it at that time again the predominant opinion there is that you would pay zakah for each year not just once okay some people are falsely believe that you just have the day the year you receive it you just pay zaka on it that year no when you receive it you would have to pay your zakah on it for each year that you actually had it and you were above the nisab and you were
35:00 - 35:30 paying your zaka and so you would have to do it for each year and so you'd have to go back into your accounts and see well if on you know year one I had 5,000 you would pay zaka on 5,000 year two my 401k went up to 15,000 you would pay zakah on 15,000 not just the 10,000 that was increased year three I now have 25,000 your increase was 10,000 between the 15 and 25 but your zaka will actually be on the entire 25 and not
35:30 - 36:00 just the 10 that incre that increased because zakah is PED is based on the total value of all your assets not just the increase in that last year right I mean we I explained this earlier that when you pay your zaka you pay your zaka based on the value of the complete assets that you have not just what was increased in that one year so that's the one that's the one thing that I want to mention a lot of people get confused when it comes to uh zaka and
36:00 - 36:30 401K so since we're talking about stocks I'll try I'll attempt to answer a few questions around stocks um stocks so stocks include stocks purchased um in the open market uh in one's brokerage account you may have a brokerage account you may have a company granted rsus restricted stock units uh company granted stock options and Company sponsored Employee Stock purchase options or purchase plan
36:30 - 37:00 esps um how do you calculate zakah on those you calculate zakah based on the market value not based on the value the day you receive them you pay zaka based on the market value the day you are calculating your zaka as far as calculating zaka on rsus you would calculate it based on those rsus that are vested again based on the market value you wouldn't pay zakah on those
37:00 - 37:30 that have not vested as far as zakah on stock options right we won't get into the legal permissibility of that we're just referring to giving zakah on stock options um you would pay zaka on that which is vested and on the profit right on the profit that you have um as far as your ESP Employee Stock purchase plans um you
37:30 - 38:00 would have to you would you know you would pay zaka um on the amount that so of course the amount that's been withheld um for the purchase of those options you would pay zaka on that and if you actually bought those stocks or those shares then you would pay stock uh you would pay zaka on the market value you don't pay zakah I I know I didn't mention this earlier you don't pay you pay zakah on gold and silver you don't pay zakah on um diamonds and platinums and rubies etc
38:00 - 38:30 etc as far as another form of wealth that we generally um don't we either don't calculate or we tend to forget to calculate happens to be your retirement plans and health saving plans and so on and so forth so zakah is you must pay zakah on all retire on all retirement and savings plans because essentially that money is yours and it's an asset that you own although it happens to be an asset in a different format it
38:30 - 39:00 happens to be sitting in some account and not necessarily just a savings account but you must pay zaka on it and I mentioned earlier your 401ks you must pay zaka on that IRAs right zaka must be paid on that Roth IRAs 5 five 529 College Savings Plan health savings plan your hsps a lot of people uh tend to forget when we're calculating flexible spending accounts um all of these all of these one pay zaka on and the rule is that which I mentioned earlier right
39:00 - 39:30 either you pay zaka on the actual value of what you have today in the bank or sorry what you have today market value of what you own or you pay zaka to based on um what you would have minus penalties and taxes if you were to um take those um out of of those accounts if and if you're not allowed to take those take those out of those accounts at that given time but zakah must be given a lot of times people have 401ks they
39:30 - 40:00 have a large amount of money sitting in their 401ks but they don't have the liquid assets to pay their zaka a lot of times women have or men anyone for that matter may have a lot of gold or jewelry but they don't have the cash to give zaka on that so this opens up another question that when you calculate your zakah must zakah be paid immediately or not no you don't have to pay
40:00 - 40:30 immediately um but you are required to calculate you're required to calculate so say on the first of Ramadan you calculate that I have all of these accounts I have my cash savings 401K Ira HSP esps whatever else it is that I have all of this I put all this together and I come I come around and my net worth is whatever half a million um
40:30 - 41:00 zakah on a half a million dollar would come up to $125,000 say you don't have $25,000 to um get you don't have liquid assets of 125,000 you would give whatever you can and then you would write it down somewhere make a note of it and spend the next few months ensuring that that obligation has actually been fulfilled with the liquid assets as you receive them so you don't have to give immediately in fact many a Time individuals sort of calculate their zaka
41:00 - 41:30 leave it aside and spend 7 8 nine months slowly Distributing that zaka so that they actually have enough money to distribute during the course of the year and when they actually run out of their zaka before the month of Ramadan comes in and before they can begin calculating they start giving in advance and maybe they've already given say $5,000 by the time they calculate their zaka they find out they need to give $ 125,000 they've already given $5 ,000 um in advance with the intention of zakah at the time of
41:30 - 42:00 giving then they can deduct that 5,000 from the 125,000 and have 7 a half thousand that they need to give as far as people who may have jewelry but don't have the liquid assets to give uh zakah on that it's still an obligation zaka still needs to be given on that gold on that jewelry in other words I like to tell people that if you need if you have two earrings and a whole lot of other jewelry and your zakat that year happens to be one earring equivalent of one earring that earring needs to go or you need to take some other portion of that
42:00 - 42:30 gold and uh make it a liquid asset in order for you to be able to give your zaka but zaka must be paid in the case of um individuals if if a wife gives zaka on behalf of the husband for his assets or if the husband gives zakah on behalf of the wife for her assets that she may have um because either of them isn't working or they are but one chooses to give zakah on behalf of the other that would be permissible that obligation is fulfilled and that
42:30 - 43:00 obligation is lifted at that time now there's another question the question is do you pay zaka if you have loans so when it's time to give zakah one of the things that you do is you deduct the loans you deduct your uh payments that you have to make and then so let's just say that your assets are worth
43:00 - 43:30 $50,000 and um you have given loans of an x amount of dollars um or you sorry you need to make payments of an x amount of dollars then in that specific case do you deduct that loan from your full asset or not most Muslims in the west if we began to deduct uh the loans that we have to pay the loans that we have to pay the loans that we have to taken on on on ourselves um your house payments if you own your
43:30 - 44:00 house and you have an institution that you are paying your zakah too sorry you're paying making payments too and you owe them an x amount of dollars or car payments for example if Muslims in the west started deducting their loans from their assets then most Muslims in the west would actually not be paying zaka and the reason they wouldn't pay their zaka is because the amount of money that they owe is far greater than the amount of money that they have the the Contemporary are of the opinion
44:00 - 44:30 that if you have debts if you have loans on which you are simply making monthly installments or monthly payments those loans will not be deducted from your assets so for example you have $300,000 that you need to pay zakah on but you have a mortgage of $500,000 well you can't say well if if I have a I have a mortgage of $500,000
44:30 - 45:00 which means I'm negative $200,000 so I don't pay zaka if that's the case most Muslims in the west not all maybe not most but many Muslims in the west wouldn't pay their zaka um or car payments or student loans and so on and so forth so any the general rule is that any um any long-term loan that you have would not be deducted from your assets at the time of calculating your zaka
45:00 - 45:30 this is the exact same stipulation in regards to Hajj as well because a lot of times people actually have tens of thousands of dollars put away to go on vacation or whatever else but then they have a loan of a few hundred, and say well I can't go for Hajj or I can't pay zaka because I have a loan of an x amount of dollars and they may utilize those liquid assets that they have to go on vacation and so on and so forth the are of the opinion that unless and otherwise you are going to take that
45:30 - 46:00 Savings of yours and pay off your loans with it if you're not going to do that then you must pay zaka on those assets that you have and I hope I've actually um clarified that I mentioned earlier any any money that belongs to the children and that if you are investing you're doing it for the children then there is no zakah um obligated on if you have given someone a loan if you've given someone a loan the
46:00 - 46:30 person who has given the loan must pay zaka on the money that has been given you could give it when you receive the loan back um you don't have to give it at that time if you don't have the assets if that loan is considered to be a bad debt a bad loan and you realize that that person's probably never going to pay you back then in that specific case um you would actually not pay um zakah on it as far as zakah on inventory
46:30 - 47:00 say you own a bakery say you own a shoe store um in all those specific cases you would calculate your assets you would calculate your inventory on the day you're calculating your zakah and then you would give your zakah on that given day to um based you would calculate you calculate all that inventory put it all together whatever amount you come up with 2 and 1 half% of that is is that which needs to be given
47:00 - 47:30 land and homes land and homes rental properties there is no zaka on the actual rental property there is zakah on the income of the rental property if you have money left at the end of the year so say you have a rental property you have your own house then you have a second or third or fourth house let's just assume that you have one extra house and the house is
47:30 - 48:00 worth $100,000 you do not have to pay zakah on that actual property you would pay zakah on the income of that property so let's assume that you're getting $1,000 in rent from that property times that by 12 in the course of one year you receive $12,000 but let's again so if that 12 that $122,000 is considered your income do you pay zakah on income you don't pay zakah on income you pay zakah on your savings which basically means that if you don't have anything anything left of those $112,000 at the end of the lunar year then you will pay no zakah on
48:00 - 48:30 it if you have some money left from that 12,000 at the end of the year then that's what you would pay your zakah on unless unless and otherwise you purchased a home with the intention of reselling it right if you purchased a home with the intention of reselling it then that is an inventory and zakah must be paid on that you may not have the money to pay zakah on that home because you've put all your money into that but whenever that house is sold then you
48:30 - 49:00 would pay zaka you would go back and pay zaka whatever you owed on that as soon as you receive the liquid assets to do so the same case goes with land a lot of individuals um buy land uh with the intention that someday they may build a house on it someday they may sell it but it's not necessarily an inventory they haven't specifically purchased it with the intention of selling it and making money if that's the case then you do not have to pay zakah on it though clearly
49:00 - 49:30 if an individual has purchased a piece of land with the intention of reselling it and making money on it then that becomes business inventory and you would pay zaka on the market value of that property not purchase value on the market value of the property um and again similarly if an individual actually purchase purches a property um just purchases it and then
49:30 - 50:00 later on decides to make it business inventory then at that point in time that person IND that individual begins to pay zaka on it or a person uh decided to purchase it with the intention of reselling it and making money on it but later on decided that I plan to live in it and so on and so forth when the intention changes whether it becomes zable or not changes as well there's there's a number of other stipulations but very very quickly how much zakah should you give to an individual some are of the opinion that
50:00 - 50:30 you should not give them more than n that obligates them at that point to give um zakah as well but keep in mind that that will just put them above the threshold above the nisab they won't actually pay zakah on it unless and otherwise they actually are above the nisab a year from then so they don't immediately become the owners of nisab one of the things Imam gazali mentioned and I mentioned earlier is find those that are that are deserving find those that are that are worth worthy of receiving and um alhamdulillah we have
50:30 - 51:00 many institutions now in the United States of America that are taking our zaka funds and very carefully Distributing them amongst those individuals that need those funds right so for example in in this institution of ours like zetuna college when the generous Community around the country gives their zaka Zuna College ensures that Zak eligible recipients are actually given
51:00 - 51:30 that zakah and not just utilized for building or construction or maintenance and so on and so forth or you may know individuals you may have leaders in your community friends in your community or people just people in your community who may know destitute um helpless homeless people um people who are respectable in our communities and may not necessarily be able to put their hands out and ask us for assistance but there are people in the community that no and I'm saying this for my experience as an IM of a
51:30 - 52:00 Masjid where I've been alhamdulillah for a number of years for over a decade now alhamdulillah where I know a lot of people in the community that are very respectable um you know people know them very well but internally I know that these are people that are almost paycheck to paycheck and many of them may not even be paycheck to paycheck and if that happens to be the case go to your local imams or teachers or leaders or whoever it is and ask them are there people in our communities that are worthy of my zaka and yes it is
52:00 - 52:30 permissible to make a tax deductible donation um when you are giving your zaka one shouldn't feel guilty about it it's perfectly permissible to do so so can you give someone more than the nisab in terms of zaka yes you can but at the same time find worthy individuals in your community that you should give to then the second stipulation is is it permissible to send your zakah overseas or not um there are multiple opinions on
52:30 - 53:00 this in fact in the in the text that I was using a few moments ago IM abif is of the opinion that the zakah of that land should be distributed in that land unless and otherwise there was a dire need elsewhere where people could actually give um the way the Muslim Community is set up today is that because of the number of immigrants that we continue to have in our communities a lot of our zakah dollars continues to go
53:00 - 53:30 overseas and there's absolutely nothing wrong with that that's perfectly fine our zakah is being fulfilled and worthy individuals are receiving the assistance and they're able to make their lives a little better than what they were before Allah subhanahu wa ta'ala facilitated for us to give that zaka to them but at the same time if we happen to be of a category of individuals where a 100% of our zakah goes over sees that we need to re-evaluate our priorities we need to
53:30 - 54:00 re-evaluate evaluate how we distribute our zaka um always try to ensure don't just randomly give zakah to institutions find out how are they utilizing your zaka are they utilizing it to pay light bills are they utilizing it for you know utilities and so on and so forth or is that money going to to the poor and needy because zakah is from the rich to the poor zakah is from the rich Muslim
54:00 - 54:30 to the poor Muslim zakah is from those who have wealth to those who do not have wealth and so be conscious of that but at the same time when you are among when you when you're calculating and you're Distributing your zakah I like to tell people that always try to ensure that your family right your family is a priority you can give zakah to your brother your sister your nephew your niece these are people that you can give your zakah to you cannot give your zakah
54:30 - 55:00 to any individual whom you are obligated to look after such as your wife your children your spouse and so on and so forth but at the same time um you can give your zaka to your brother sister nephew needs or relatives come first and then after that as you distribute your zaka always ensure that you make room for National institutions as you make your contributions to International institutions we have zakah eligible
55:00 - 55:30 Muslims right here in the United States of America we have homeless Muslims right here in the United States of America we have Muslims who do not have a meal right here in the United States of America so for those individuals who are under this deception that every Muslim in America is Rich and all the poor Muslims are overseas we need to rethink that there are a lot of Muslims right here in this community of ours that happen to be in need as as
55:30 - 56:00 well um how do you account for error in the zakah that's that you calculate um always try to give a little extra Zak you know it should pinch you a little it's meant to pinch you you haven't attained any goodness until you've spent out of that which you love if if if if our contribution if giving doesn't pinch us then we haven't received the full reward it should be a
56:00 - 56:30 little difficult for us put your trust and promise in Allah subahu waala the more if you I I I mentioned this last week in my if you count your money it is because you count your money right give without within your capacity right give without within your capacity and Allah subhanahu wa'ta'ala will bless us without the moment we start you know you still have to calculate you still have to calculate don't get me wrong you
56:30 - 57:00 still have to calculate all your assets once you've done your calculations now don't nickel and dime Allah subhanahu wa ta'ala well this I can give away this I should do away with this I can do no you know it's okay a few hundred that you may have to give extra in some in some cases a few thousand dollars I remember last year I was asked a question and then I did not know the the answer so I consulted with a few friends of mine um and one of them responded and said though technically you don't have to
57:00 - 57:30 give your zakah on this amount but if you have and the question was around $250 right a very specific question that I got asked last year and so one of the scholars commented to my to my question and said you know if an individual has $10,000 of assets giving away 250 shouldn't be so difficult especially when you're thinking a by giving this 250 Allah will protect the 10,000 that I have and by giving this 250 Allah subhanahu wa tala will increase this $10,000 that I have so always try to
57:30 - 58:00 keep that in mind when we're giving always try to give extra um and inshallah what I'm going to do is I'm going to um stop there inshallah based on our promise that we will end at 6:00 um you can continue uh sending in your questions to um the the the website or the the web address that happens to be on on our page I think it's marketing at zetuna doedu you can continue asking your questions and we
58:00 - 58:30 will attempt inshallah to answer those questions um over the course of Ramadan but if we're unable to then um please do forgive us and we ask that you continue to uh keep um this college of ours in your duas and in your prayers during the course of this month keep our students and our graduates in your duas keep our Administration our faculty our students in your duas and your prayers during the course of this month and that you keep
58:30 - 59:00 these buildings that you have generously contributed towards purchasing in your prayers and we invite all of you during the course of this summer if you have a moment we invite you to come to California to Holy Hill and Berkeley to see that what your dollars have done and what your duas have done in in in in you know making sure that we are able to have these facilities We Begin very soon our Arabic intensive summer program inshallah we ask you for your duas and
59:00 - 59:30 your success in the success of this program and we invite you in the future to come yourself and send your children to this program of ours may Allah subhanahu wa ta'ala make this uh month of Ramadan a blessed one for all of us may Allah subhanahu wa ta'ala make this month of Ramadan a blessed one for all of you and from all of us here at zetuna College in Berkeley California we wish you all a Ramadan e