Fatawa >Zakat


2. Zakat of Crops

Payment of zakat tax is obligatory in four kinds of crops: wheat, barley, dates, and raisins; however, as a matter of obligatory Ihtiyat, it is obligatory in all kinds of crops, such as rice, lentils, sesame, etc. it is not obligatory in vegetables, such as potatoes, cucumbers, carrots, etc.

Payment of zakat requires two things:

First. The seasonal produce should reach a minimum threshold (nisab). This is estimated at 847 kg. anything over and above this limit should attract zakat. Should the produce be less than the set limit, no zakat should be payable.

The criterion for reaching this threshold is when the produce is ready for harvest; for example, grapes could reach that threshold one they are reaped, yet it may fall short of the threshold when they turn into raisins, in which case zakat does not become payable.

However, each type of produce should be counted separately for the sake of calculating the zakat tax; for example, you cannot treat barely and wheat as one produce for this purpose, in that each of which should reach the threshold in its own right.

16. Numerous fields count as one insofar as the season of their produce is concerned, although such produce may vary in the time span, say a month, of its harvest form one area to the other. Thus, one threshold should be considered for all, provided that the time gap between one produce becoming ready for harvest and the other is so wide that you can no longer treat it as that of one season.

Second: Crops should have become ready for harvest. That is, zakat tax does not become payable unless it is ready. It is widely the view of jurists, that in the case of barley and wheat it becomes thus when the grains become fully-grown and solid, although they might still be green. As for dates, it is the time turn either yellowish or reddish; in grapes, it is the time they are still unripe and sour.

However, apparently, established practice (urf) should be applied as to what people consider as ripe insofar as wheat and barley are concerned, which concurs with the view held by the jurists. As for grapes and dates, they cannot be considered as ready for harvest in the stage of ripening, just before they turn yellow or red – in dates, and fully –blown, not unripe and sour, in grapes.

17. Zakat tax rate varies commensurate with the method of irrigation. Should the trees or crops be watered naturally, such as rainwater and the like, i.e. without cost to the owner, the rate is one tenth. But, if it was watered with an extra effort (and cost), such as well water, water brought up by modern water pumps and the like, the rate of zakat is half of one tenth.

However, it has to be noted that the different rates of zakat have something to do with the fruit being cultivated, rather than the tree, in that if, when first planted, the tree used to be mechanically watered, only to be left to be naturally watered when it bore fruit, the rate of zakat shall be on tenth.

18. In any one season, there may be more than one method used in watering the crop, i.e. either through the use of manpower or naturally (rainwater). Should any method be the predominant one, the zakat rate must be charged on that particular method. Should both the methods be on a par, the crop should be divided into two halves; one tenth should then be charged on one half and half of one percentage point of the one tenth on the other half, i.e. three quarters of one tenth.

If the proprietor was not sure which to split the crop for not being not sure which of the two methods of irrigation was the predominant one, paying half a percentage point would suffice, although paying more than that is more meritorious as a matter or voluntary precaution.

19. One should hasten to set aside the amount of zakat of crops once the crop is reaped/harvested. The proprietor shall be deemed sinner, if he does not do so, unless for a good reason.

20. The quality of the produce may vary between good and bad. There may be other variations within these two qualities. Should all the produce be good, but with varying degrees of goodness, the proprietor may choose to pay the rate on the least good. If the produce was all-bad, the owner can pay the rated on the most inferior quality of the produce, if he wishes. Should the quality of the produce range from bad to good; it is not permissible to pay from the bad for the good.

21. The non-exemption of all the expenditure incurred by the proprietor in cultivating the produce, before the zakat becomes due, cannot be ruled out. However, all the expenditure incurred after fruition, such as expenses for harvesting, storing, transporting the produce, should be exempt, i.e. by deducting same from the (total) amount of zakat, after the permission of the Marji' has been obtained.

22. It is permissible to pay the amount of zakat of crops in its equivalent of gold and silver, or banknotes and coins. Bartering can also be used, such as paying it in fabric, livestock or any other capital assets (a'ayaan); however, it is preferable not to resort to the latter way of payment on the basis of voluntary precaution.

23. There may arise two cases when the ownership of the crops is transferred to another person by way or inheritance, sale or gift:

i. Upon the death of the mukallaf the ownership of crop may devolve to the inheritors. Should the inheritors assume ownership of the produce after the zakat had become due, they must cater for its payment from the estate, in that it is a settlement of debt on the deceased. Should death occur before zakat has become due on the crops, the inheritors are deemed new owners; it therefore follows that they should cater for the payment of zakat once all conditions, among which are the produce exceeding the threshold (nisab) and the inheritor be an adult, are met. As for nisab should there be more than one inheritor, exceeding the threshold has to be fulfilled in each one's share of the inheritance for zakat to be paid. Otherwise, it would not become due.

ii. The ownership may have been transferred by way of sale/gift. Should the produce have become for zakat tax before the transfer, and the previous owner did not pay it, either through transgression or due to an oversight, the tax has to be settled; moreover, it is not permissible to have right of disposal over the amount of zakat. Here there are two courses of action. The purchaser can approach the vendor with a view to reaching a settlement over the payment of zakat; the purchaser may take the initiative to pay the zakat and go back to the vendor for reimbursement.

Should zakat become due after the date of transfer of ownership to the new owner, he should cater for the payment, if all requirements have been met.

24. Zakat of crops is paid only once even if the stock remains above the threshold for years.

25. We have already ruled that the time the payment of zakat becomes obligatory is when the produce is reaped and therefore be weighed or measured to assess the right amount of zakat tax. That said, it is not acceptable to have an estimate instead; the Marji' (al hakimush shari'i) have no right to demand payment before the actual weighing or measuring of the produce.

However, it is permissible for the mukallaf to set aside the amount of zakat before the weighing or measuring process, and after zakat becomes obligatory on the produce before it is garnered. In this case, estimation has to be adopted. Here, either the Marji' or the owner, by virtue of his own expertise or through experts in the field, may do the estimation; either of the two methods would be accepted as a substitute of weighing or measuring.

3. Zakat on Gold and Silver

The basis of charging zakat on gold and silver is the golden dinar and the silver dirham which were in circulation for a long time in Islamic societies. However, zakat is not confined to what could carry the label of dinar and dirham. It covers any money minted with great proportions of gold and silver. It is though problematic to rule that is obligatory to pay zakat on money in whose minting the blend is predominantly not gold nor silver. The other requirement for the obligation of paving zakat to become operative is reaching the threshold of either gold or silver.

So, the weights of the then shari'i dinar and dirham remain the yardstick for determining the threshold of gold and silver money of this day and age. Once all the requirements, as shown hereunder, are fulfilled payment of zakat becomes due:

i. It should be minted for the sole use of monetary transactions, in that it can no longer be considered bullion, pieces of jewelry, or any other uncrafted items. It is immaterial whether the minted money was Islamic on non-Islamic. The type or insignia the money carries is also immaterial, in that coins bereft of any sings can also be liable for zakat tax so long as they are still in circulation.

That said, the prime objective of minting the money should be its ultimate use as monetary method of exchange in commercial as well as other transactions. Should the money be taken out of circulation or become outdated, as it the case of dirham and dinar, apparently, no zakat should be payable on it. However, should the money no longer be a national vehicle of monetary exchange, yet it is still circulated among some quarters and coveted by some people, albeit at a very limited level, such as in the case of golden lira, it remains liable for zakat tax.

The state of gold and silver coins would not affect the obligation of paying zakat on them. Goodness or badness of the quality of gold and silver is a technical term used to determining the ratio of other metals blended with them. That is, the more of metals other than gold and silver are used in the minting process. The inferior the quality. The opposite is true.

26. It is widely recognized among the jurists that zakat is not obligatory on banknotes and coins used as currency nowadays. This is based on the understanding that the issue of obligation (or payment of zakat) is predicated on gold and silver being the predominant metals.

However, there is anther view, which calls for the payment of zakat on the currencies being circulated nowadays. This opposing view bases its rationale on the fact that bygone currency of gold and silver was a means of exchange among people, recognized for the value they represent as such. There was no other medium of monetary exchange. By the same token, it can be said that the currencies of this day and age serve the same purpose of gold and silver money which was circulated in the olden days, i.e. comparing like with like, not commodities or other goods exchanged for money.

It is noteworthy that traditions talking about zakat conclude that it was designed to meet the needs of people. Thus, it flies in face of opinion espousing the non- obligatoriness of payment of zakat on banknotes and other forms of currency which are the norm in world today. This form of monetary system has become so widespread that gold and silver currency has become a rare commodity, so much that the value of dirhams and dinars which are still in circulation is determined by some currencies, such as the US dollar.

This opinion is more akin to the spirit of both the hadiths on zakat and why it was legislated. It should therefore follow that adopting it is an embodiment of siding with that which is practical. Accordingly, paying zakat on banknotes should be adhered to as a matter of obligatory precaution.

ii. Reaching the Threshold.

When gold weighs twenty gold dinars or more zakat becomes due. One gold dinar is equivalent to approximately half of the weight of an Ottoman Rashidi Lira. In laymen's language, it is one part or unit in every forty parts/units. In juridical terminology it is equivalent to one quarter of one percentage point.

So, no zakat shall become obligatory when gold is below the threshold of twenty dinars; anything over and above that is not taxable unless it totals four, in which case it should be charged at the rate of one quarter and so on for every extra four dinars.

The threshold of silver is the weight of two hundred dirhams. According to the experts, each dirham is equivalent to two and a half grams. The amount of zakat due shall be five dirhams, i.e. at the rate of one quarter of one percentage point.

Anything below the two hundred dirhams in weight is not liable for tax. However, anything above the minimum is exempt unless it forms a new threshold of forty which yields one dirham of zakat for every extra forty dirhams in weight, without a ceiling.

To sum up, the rate which should be paid when both gold and silver reach their respective threshold is one quarter of one percentage point; in other words, one of forty or two and a half percentage points.

3. The Lapse of One Year

This means that the property, i.e. in kind, should remain in the ownership of the person for one full year. This full year elapses at the start of its twelfth month, when zakat should become payable. However the new year should not begin unless the twelfth month draws to a close, i.e. when the following month starts.

27. The yardstick for determining the threshold is the total weight of either the dinar or dirham, not the net weight of gold and silver used in their minting.

28. Gold currency should be treated as a class of its own for the sake of determining the threshold. The same goes for silver currency. However, should there be different types of such currency as that of the Ottoman Lira or English Pound, they should be treated as one threshold, regardless of the fact that they may vary in weight. The same should apply to silver dirhams.

29. So long as gold and silver remain above the threshold, and without any alteration, i.e. in kind, zakat tax has to be paid on them every year. Should they be exchanged for others or fall below the threshold no zakat tax should be payable that year, and so on.