This short FAQ was compiled by Imam Zia of the Irving Masjid. If you have follow up zakat questions, send us a quick email and we’ll try to cover them in one of our next podcast episodes. Also make sure to check out Episode 17 of our Podcast with Imam Joe Bradford covering questions on Zakat.
At this time of the year I get inundated with questions about zakat. Here are the most common questions:
1. If a woman is using (wearing) her jewelery, does she need to pay zakat?
Yes, she does. Although some scholars have said they don’t have to, the majority rule that she will have to pay zakat on it.
2. Is there zakat on precious stones?
There is no zakat on precious stones, like diamonds, pearls etc. However if a person is buying or selling them as a business, then he will have to pay zakat on it.
3. Is there zakat on my own house/car etc.
4. Is there zakat on investment properties I have bought here or abroad?
No. But you must take all acquired rent and add it to your total savings and pay zakat on that. If a person is selling and buying property constantly as a business there may be zakat on that.
5. Can I give zakat to relatives?
Yes, but you cannot give to parents, grandparents etc or children grandchildren etc. Other than that, if you have a needy relative, it is more rewarding to give to them.
6. Can I give zakat on building a mosque or madrassah?
The difference of opinion is based upon the wording in the Quran “Fee Sabeelillah” as one of the recipients of zakat.
Traditionally “Fee Sabeelillah” means using zakat funds to propagate the religion of Islam. However, some prominent Saudi scholars like Sheikh Bin Baz (RA) have given the fatwa that because masajid are also means of propagating the religion, it is permissible to include them in this category of “Fee Sabeelillah”.
In any case, we do have a separate zakat fund in the masjid which is used to take care of genuinely needy people, so you can donate to that directly.
7. Is there zakat on 401k or IRA funds?
The key reason for zakat being given is accessibility to funds. As you can withdraw these funds, albeit with a penalty, you should pay zakat on the total amount after deducting the penalties that would be incurred.
8. I have give a loan to someone, should I pay zakat on that money?
Yes, you should. However if you lose hope of ever getting that money back then no zakat will be due. You can also let the zakat accumulate until you get the money back. So if you got the loan back after say three years, you pay the accumulated zakat of three years.
9. I have loans. Should I pay zakat?
Traditionally the ruling is no. However in the USA, most people have loans, and they also keep savings. If a persons total paycheck is going to pay for the loans and bills, then obviously there is no zakat. But if a person is purposefully keeping savings aside and not paying his debts, he should pay zakat on these savings on the side.