What is Zakat?

Zakat is not a voluntary charity — it is a mandatory religious obligation for every Muslim whose wealth exceeds the Nisab. The Quran mentions Zakat alongside Salah (prayer) 82 times, indicating its fundamental importance in Islam.

Zakatable assets include: cash and bank savings, gold and silver, business inventory (goods for sale), receivables (money owed to you that you expect to receive), and investment portfolio value. Non-zakatable assets include: your primary home, personal vehicle, clothing, household items, and equipment used for work.

Zakat recipients are defined in Surah At-Tawbah (9:60) as eight categories: the poor, the needy, Zakat administrators, those whose hearts are to be reconciled, to free captives/slaves, those in debt, in the cause of Allah, and the wayfarer.

Imagine a family holds ₹2,00,000 in a savings account, ₹3,00,000 in a fixed deposit, 60 grams of gold and ₹50,000 owed to them by a reliable friend. Add up the cash, the value of the gold and the receivable, subtract short-term debts they owe that are due now, and check the total against the Nisab.

If that net total is ₹10,00,000 and has stayed above Nisab for a lunar year, the Zakat is 2.5% of it, which is ₹25,000. The Zakat Calculator walks through each asset type so nothing is missed.

A few areas have more than one accepted view, so it is worth asking a qualified scholar. Zakat on gold jewellery worn regularly is one: some schools treat it as zakatable, while others exempt jewellery for personal use. Treatment of shares, retirement funds, provident funds and long-term loans you owe also varies.

Where views differ, many families follow the position of the school they follow or the guidance of a trusted local scholar. This guide explains the common cases and does not replace that advice.

The Quran (9:60) names eight categories of recipients: the poor, the needy, those employed to collect it, those whose hearts are to be reconciled, those in bondage, those in debt, in the cause of Allah, and the traveller in need. Zakat is generally not given to your own parents, grandparents, children or spouse, whom you are already obliged to support.

Pay it with the right intention and, where possible, to a trusted organisation or directly to eligible people. Keep it separate from voluntary charity (sadaqah), which has no fixed rate or threshold.