What is the meaning of the terms Lillah and Sadaqah and is there a difference between the two?
In contemporary times, the terms Sadaqah and Lillah are generally used refer to Nafl (voluntary) charity.
Sadaqah generally is regarded to be for the benefit of the poor (irrespective of whether they are Muslims and recipients of Zakaat or not). Lillah is commonly understood to be for any Deeni cause such as the establishment and mantaining of Masajid, Madrasahs, graveyards, and other Deeni institutions, etc. It not only restricted for the benefit of the poor.
However, apart from the common usage, Sadaqah, technically can also refer to compulsory charity. An example of this is Sadaqatul Fitr.
Hence, whilst the term Lillah is specific to voluntary charity, the term Sadaqah is technically more general and may refer to compulsory charities as well. Where Sadaqah refers to compulsory charity, then it should be restricted to those who are eligible to accept Zakaat.
Given the above, we advise that when institutions are being given Sadaqah one should specify it to be either optional or compulsory and if optional, one should specify whether it is restricted to the poor only or if it could be used for any other Deeni cause.
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Darul Ihsan Fatwa Dept
What should I do with interest money?
Interest monies must be disposed off without the intention of any reward. It may be given to poor and deserving Muslims (i.e. recipients of Zakah) or to needy non-Muslim persons.
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Darul Ihsan Fatwa Dept.
Can the debts of a deceased who was eligible to receive Zakaat be paid with Zakaat monies?
It is not permissible to utilise Zakaat funds to pay off the debts of a deceased person. One of the fundamental requirement in the discharging of Zakaat is the aspect of Tamleek. Tamleek means to transfer ownership of the wealth to someone who is living and eligible for Zakaat. In this case (i.e. discharging the debt’s of a deceased), this condition is not met, hence discharging the debts of a deceased with Zakaat is not valid.
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Darul Ihsan Fatwa Dept.
If someone does a sacrifice for a special need like for the safety of their travel or for the wellbeing of their children or for business prosperity, etc. can the one who does this sacrifice also eat that meat?
This appears to be Sadaqah which differs from Udhiyyah/Qurbani. The meat of a Sadaqah sacrifice cannot be consumed by the one making the sacrifice. It should be given out in charity to the poor and needy.
Darul Ihsan Fatwa Department
Are debts regarded as deductible liabilities?
The classical juristic texts state that all debts are regarded as deductible liabilities when calculating Zakah. However, some contemporary jurists differentiate between the types of debts, e.g. debts which are for commercial expansion or investment purposes and personal debts that are basic, whilst others do so based on the term of repayments of short term and long term debts.
Darul Ihsan is of the view that in long term debts, only the coming twelve months instalments due will be considered a liability and deductible.
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Darul Ihsan Fatwa Department
What happens if one’s Zakatable assets get destroyed after the Zakatable year has passed but before discharging the Zakah?
- If one’s Zakatable assets are destroyed after possessing it for a full Zakatable year, two situations arise:
- a) If the wealth was destroyed in a way that was out of one’s own doing then Zakah will only be payable on the remainder if any.
- b) If the Zakatable wealth was deliberately destroyed or spent then Zakah will be due in full
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Darul Ihsan Fatwa Department
How is Zakah calculated on shares/unit trusts and partnerships?
The net Zakatable assets of the company/fund/ partnership will be considered and Zakah will be calculated pro rata of one’s investment/ shareholding. However, calculating Zakah of the listed company share or unit trust maybe cumbersome. Therefore, one may pay Zakah on the full market value of the investment.
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Darul Ihsan Fatwa Department
Can Zakah be given in kind?
Zakah can be paid in cash or kind. Hence, one can discharge goods and consumable items as Zakah. When giving in kind, the item should be in good usable condition.
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Darul Ihsan Fatwa Department
What are the conditions for the validity of discharging Zakah?
- It is necessary for the validity of Zakah to have the intention of discharging Zakah.
- This can be done in several ways: – intention is made when handing over Zakah to the recipient – or intention is made at the time of separating and setting aside money for discharging Zakah., – or the intention can be made after discharging the wealth, whilst the Zakah is still in the possession of the recipient.
- The condition for the validity of the discharge of Zakah is “Tamleek” – where ownership and possession of the wealth is transferred unconditionally to the deserving recipient. Hence, Zakah cannot be given or used for the construction of a Masjid, Islamic institute, etc. nor can Zakah funds be used to prepare meals for deserving recipients without giving them unconditional possession over the food.
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Darul Ihsan Fatwa Department
Can Zakah be given to someone else to discharge on one’s behalf?
Authority can be delegated to another person or an organisation to distribute Zakah on one’s behalf. However, if this representative does not distribute the Zakah, or distributes it incorrectly then one’s Zakah will not be discharged, and will remain unfulfilled.
Can Zakah be discharged gratuitously on behalf of another person?
Zakah may be discharged gratuitously for another person provided this is done with the consent of the one who is obligated to do so. E.g. if the husband wants to discharge the Zakah of the wife for her, then he may do so with her consent or knowledge.
Zakah may be discharged on one’s behalf by another person upon one’s request and this will be a debt which should be repaid.
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Darul Ihsan Fatwa Department
Is Zakah compulsory on gold and silver that is for personal use?
All forms of gold and silver are Zakatable whether they are in use or not. This includes jewellery that contains 50% or more gold and silver content, gold and silver coins (e.g. Kruger coin), gold and silver ornaments, utensils, etc.
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Darul Ihsan Fatwa Department
What value should be considered when calculating stock in trade?
The market-rated value of the trading stock will be considered for Zakah. Stock includes raw materials, redundant stock, any asset specifically purchased with the intention of resale.
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Darul Ihsan Fatwa Department
Do I pay Zakah on all my cash on hand?
Zakatable cash includes petty cash, float, cash on hand, cash at the bank, foreign currency, accumulated income from rental/property and investments, dividends accumulated from investments, lump sum pay-outs, etc.
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Darul Ihsan Fatwa Department
How does one calculate Zakah and does assets have to be in one’s possession for a complete year?
A person who possesses Nisab for the entire Lunar year will be liable to pay Zakah, irrespective of the fluctuations during the year provided the net-value had not reached zero.
Hence, Zakah is paid on the entire value of the net Zakatable assets (Zakatable assets minus liabilities) in one’s possession although some assets may have entered one’s possession at different points during the year.
2.5 percent of this net amount shall be discharged as Zakah
If at any point during the year, the net-value of Zakatable assets reached zero or a person had more debts than Zakatable assets, the Zakatable year will change. The new Zakah year commences upon regaining the equivalent of Nisab.
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Darul Ihsan Fatwa Department
We don't have our own house but we have a plot and some saved money for construction purposes. We understand that we don't have to pay Zakat on a piece of land, but we not sure about the money saved which is still not enough for construction purposes.
The money saved will be added to one’s other Zakaatable assets when working out and calculating one’s Zakaat.
Iftaa Department, Darul Ihsan Islamic Services Centre
Is Zakah calculated on the solar year or lunar year?
Please identify items that are non-Zakatable?
There is no Zakah on the following:
- Metals other than gold and silver such as platinum, titanium, etc.
- Property, Land and Building
- Household effects, fixtures and fittings
- Motor vehicles
- Personal effects (that are not gold/silver)
- Diamonds, pearls and other precious or semi-precious stones
N.B. If any Non-Zakatable asset is purchased for resale then it shall be regarded as stock in trade and considered as Zakatable.
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Darul Ihsan Fatwa Department
When does a person’s Zakatable year commence?
The very first day that one possesses wealth equivalent to the value of Nisab heralds the commencement of his/her Zakatable year.
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Darul Ihsan Fatwa Department
Is there Zakah on livestock?
Livestock such as: goats, sheep, cows, bulls and camels for breeding purposes are Zakatable. Local Ulama should be consulted with regard to what amount of Zakah is due. Livestock for trade purposes is considered as stock in trade.
And Allah Knows Best
Darul Ihsan Fatwa Department
What is considered as receivables for Zakah purposes? Is there Zakah on monies owed to me through loans and other receivables?
Zakah is due on debtors, loans, deposits (municipal, rental), voluntary pension/provident funds, retirement annuities, etc. are considered receivables.
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Darul Ihsan Fatwa Department
Is Zakah payable on all my wealth or on certain assets?
Zakah is discharged on Zakatable assets only. Zakatable assets are as follows:
- Gold and silver
- Cash
- Stock in trade
- Receivables (monies owed to you)
- Shares/unit trusts/partnerships
- Livestock
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Darul Ihsan Fatwa Department
If you invest in unit trusts property investment do you pay Zakaat on total investment or profits?
The Unit trust itself is Zakaatable.
Zakaat on Shares/Unit Trusts
Zakaat is technically not due on the entire share/unit. Rather Zakaat is only due upon the Zakaatable assets of the company (i.e. the market value of the merchandise as well as cash and debtors etc. of the company). As far as the non-Zakaatable assets of the company are concerned e.g. fixtures, fittings, transport vehicles, etc. which are not part of the merchandise of the company, the value of all these things will be evaluated in the share and will not be taken in account when discharging the Zakaat. If it is difficult to differentiate between the Zakaatable and non-Zakaatable assets of the company, then as a precautionary measure one should discharge the Zakaat on the full current market value of the entire share as this will generally safely reflect the net-asset value (plus demand for them).
Therefore, if a company has issued 1 000 shares or a unit trust has issued 1 000 units and you have purchased 100 shares or units then you own 1 tenth of the company or the unit trust. If the Zakaatable assets of the company or fund equals one million Rand then you have to give 2.5% of one tenth of 1 million Rand which will be R2 500.
Zakaat on the profits depends on what was done with the profits.
If it is not reinvested but taken out it will be considered as cash at hand. If this amount is still in one’s possession at the end of the Zakaatable year then it will be Zakaatable as cash. If it was already spent during the course of the year then there is no Zakaat.
If the profits were reinvested by purchasing units etc. then Zakaat will be paid in the same way Zakaat is paid on unit Trusts.
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Was Salaam
Can a Step Mother give Zakaah to her step daughter & the other way around also?
Yes. It is permissible for a step mother to give her step daughter Zakaat if she is indeed a worthy recipient of Zakaat.
And Allah Ta’ala Knows Best
When I got married I was gifted lots of gold jewellery. However, I do not have an income, hence cannot afford Zakaat. What do I do? Do I sell the jewellery? My husband cannot afford to pay Zakaat as well.
If the wealth you possess in the form of gold, silver, cash, merchandise, or livestock is to the value of Nisab, then discharging Zakaat on such wealth is obligatory. One is obliged to pay Zakaat on gold and silver jewellery that is for personal use.
If one does not possess cash, then some portion of the jewellery should be sold in order to pay the Zakaat. Another option would be to give an item from the jewellery to the recipient of Zakat.
And Allah Ta’ala Knows Best
Was Salaam