Showing posts with label islam; zakat; zakah; poverty; development; islamic finance; banking. Show all posts
Showing posts with label islam; zakat; zakah; poverty; development; islamic finance; banking. Show all posts

Thursday, October 22, 2015

Life Insurance is Haram

Why conventional Life Insurance is Haram


Objections raised on Conventional Life Insurance
Apart from the commonly held view among Muslims that life insurance is not permissible in Islam on the grounds that it reflects disbelief that God has decreed the moment of one’s death, or distrust in God’s providence, some Islamic scholars and many Muslims take a strong view that life insurance is totally prohibited in Islam because of the way life insurance is operated in the conventional system. Conventional insurance contains elements that are not in conformity with the principles of Shari’ah:
Riba: Interest
·         A life insurance policy under the conventional system contains elements of riba where premium income is invested in interest-bearing assets and securities.
·         An element of interest also exists in conventional life insurance products – as the insured, on his death, is entitled to get much more than he has paid
·         Insurance funds invested in financial instruments such as bonds and stocks contain an element of riba. Takaful contributions paid by participants/policyholders under a Takaful scheme are operated on the basis of mudarabah (profit-and-loss sharing) free from elements of riba.

Quran - Allah is All Merciful
Dua - Guidance and Piety

Maysir: Gambling
·         The insured contributes a small amount of premium in the expectation of gaining a large sum
·         The insured loses the money paid for the premium when the insured event does not occur
·         The insurance company will be in deficit if claims are higher than the premiums paid when a life insurance policyholder dies after only paying part of the premium his dependents receive a certain some of money which the policyholder has not been informed of and has no knowledge as to how and from where it has been derived.
·         The idea of a conventionally designed life insurance policy is that if the assured dies at any time before the maturity of the policy, the nominee(s) is entitled to recover from the insurer the whole amount agreed in the policy. While if the assured is alive at the expiry of a permanent life policy period, the insured is also entitled to the whole amount agreed in the policy, plus the interest, dividends and bonus, subject to the company’s policy. On the contrary, the paradigm of a Takaful model of life insurance is that if the assured dies at any time before the policy matures, the beneficiary(s) is entitled to recover from the insurance company the whole amount of paid premiums, the bonus and dividends according to the company’s policy and a share of the profits made on the paid premiums, plus a donation from the company’s charitable fund according to the financial status of the beneficiary(s) (i.e. if the beneficiary(s) is financially in good condition the amount will be less, but if the beneficiary(s) is financially weak and unstable the amount could be greater). Such a transaction is considered as co-operation towards the welfare of the helpless people in society, and it is thus in line with the ruling in The Qur’an. “…Help ye one another in righteousness and piety...” [5:2]
·         However in the case that the assured is still alive upon the expiry of the policy period, the assured is entitled to recover from the company the whole amount of the paid premiums, a share of the profit made on the paid premiums according to the principle of mudarabah bonus and dividends according to the Takaful company’s policy.


Gharar: “Uncertainty”
·         The insurance contract contains excess uncertainty whereby a person pays a cash amount for payment of a claim against the occurrence of a future event when it is not known whether the event will actually take place and the time it will occur is also not known. Any form of contract which is characterized by the domination of one party at the expense and unjust loss to the other is classified as Gharar. When a claim is not made the insurance company may acquire all the profits whilst the participant may not obtain any profit whatsoever. The loss of premiums on cancellation of a life insurance policy by the policyholder, or the "double standard" condition of charging a customary short period in general insurance, whilst only a proportional refund is made if the insurance company terminates the cover is also considered as unjust.
·         In the operation of a life insurance policy under the conventional system, the payments for the agents are to be paid out of the insured’s paid premiums.
·         Whereas under the Islamic model of a life insurance policy the agents work for the company and thus they should be paid by the company itself. This means, the payment for the agents could include a share of the profits made on the paid premiums, plus dividends and bonus according to the company’s policy.
Insurable interest
·         Everyone has unlimited insurable interest in their own life and, theoretically is entitled to effect a policy for any sum assured. In practice, the cost of the policy often limits a person’s ability to insure his or her own life; a person who is married also has interest in the life of his or her own spouse. Certain people can insure the life of others with whom they bear a relationship, recognized in law, to the extent of a possible loss. Accordingly, in a business partnership the partners can insure each other’s lives, as they stand to lose on the death of one of them. In the same way a creditor stands to lose money if an unsecured debtor dies before repaying the loan, and therefore has insurable interest to the extent of the unsecured loan plus interest.
·         In a conventional system of life insurance, the nominee(s) is an absolute beneficiary(s). Suffian J., in Re Man bin Mihat by virtue of Section 23(1) of The Malaysian Civil Law Act 1956, decided that the nominee inter alia in a life insurance policy is an absolute beneficiary who takes absolutely and exclusively the benefits of the policy. In contrast, the nominee(s) in a life policy under the Takaful model is not an absolute beneficiary(s) but a mere trustee, who is in a position to receive the benefits of the policy on behalf of the insured’s heirs and distribute it among them according to the principles of mirath (inheritance) and wasiyah (bequest). In Karim V. Hanifa, The High Court of Karachi ruled that the nominee(s) in a life insurance policy is nothing more than an agent. The National Council of Muslim Religious Affairs in Malaysia, also issued a Fatwa to the same effect in 1979, that the nominee(s) in a life insurance is a mere trustee who is supposed to receive the benefit of the policy and distribute it among the heirs of the assured, according to the principles of mirath and wasiyah.
·         In other words, the insurable interest, under the conventional system it is vested in the policyholder solely, should he/she be alive upon the expiry of the policy period. However, in the event of the death of the insured within the policy period, the insurable interest will be paid to the husband or wife, parents or children, benefactor or other nominated beneficiary or trustee, company and director, partners, mortgagor and mortgagee, according to the policy. In contrast, under the Islamic model, insurable interest is vested in the assured or in the insured’s heirs, according to the principles of mirath and wasiayah.
Rational Outlook
·         Having a life insurance policy does not mean just insuring one’s life but is a fair financial transaction for the benefit of certain helpless people in society. The rationale behind having life insurance may be considered as follows:
·         It is one of the means used to provide a material safeguard for the offspring of the deceased and thus in line with the saying of Prophet Muhammad: “It is better for you to leave your off-spring wealthy than to leave them poor, asking others for help” (narrated by Sayid bin Abi- Waqqas, Companion of Prophet Muhammad)
·         It provides future material security for widows and other dependents of the deceased (assured). Prophet Muhammad in fact encouraged the provision of security for widows and poor persons, as recorded in one of his Traditions: “One who looks after and works for a widow and for a poor person (dependent), is like a warrior fighting for the cause of Allah, or like a person who fasts during the day and prays throughout the night’ (narrated by Safawan bin Salia, Companion of Prophet Muhammad)
·         It ensures that certain persons (widows, orphans, etc) will have protection from unexpected future material difficulties, which otherwise may result in hardship for those people. Prophet Muhammad advised the people to protect one another from any form of hardship and difficulties when he said to them: “Whoever removes worldly grief from a believer, Allah (SWT) will remove from him one of the grief’s of the Day of Judgment. Whoever alleviates the problems of a needy person Allah will alleviate his problems in this world and the next “ (narrated by Abu Huraira, Companion of Prophet Muhammad)
·         It ensures co-operation and solidarity among participants. It is also a positive initiative by the assured towards a positive material status for widows, offspring, etc. Hence, such co-operation towards a positive goal is, in fact, ruled in The Qur’an.
·         “Help ye one another in righteousness and piety’’ [5:2]
·         It is like taking an initiative towards ensuring a self-reliant society and alleviating hardships. It is in line with the Qur’an ruling. “Allah intends easy life for all of you, while He does not want you to be in difficulties...” [2:185]


Tuesday, July 19, 2011

How to Pay Zakat?

How to Pay Zakat?

Zakat
Zakat is one of the fundamental institutions in Islam, In importance, it is placed next to prayer. The commandment of Zakat is often coupled with the commandment of Salah in the Holy Quran. For example:
Surah Bakarah Verse43;83;110;177;277.

وَأَقِيمُوا الصَّلَاةَ وَآَتُوا الزَّكَاةَ وَارْكَعُوا مَعَ الرَّاكِعِينَ ﴿2:43﴾
(2:43) establish the Salat, pay the Zakat and bow down before Me along with those who bow down.
وَإِذْ أَخَذْنَا مِيثَاقَ بَنِي إِسْرَائِيلَ لَا تَعْبُدُونَ إِلَّا اللَّهَ وَبِالْوَالِدَيْنِ إِحْسَانًا وَذِي الْقُرْبَى وَالْيَتَامَى وَالْمَسَاكِينِ وَقُولُوا لِلنَّاسِ حُسْنًا وَأَقِيمُوا الصَّلَاةَ وَآَتُوا الزَّكَاةَ ثُمَّ تَوَلَّيْتُمْ إِلَّا قَلِيلًا مِنْكُمْ وَأَنْتُمْ مُعْرِضُونَ ﴿2:83﴾
(2:83) Remember that We made a solemn covenant with the children of Israel to this effect: worship none save Allah: be good to your parents, to your relatives, to the orphans and to the helpless; speak aright with the people: establish the Salat and pay the Zakat. But with the exception of a few, you all slid back from it and are paying no heed to it even now.
وَأَقِيمُوا الصَّلَاةَ وَآَتُوا الزَّكَاةَ وَمَا تُقَدِّمُوا لِأَنْفُسِكُمْ مِنْ خَيْرٍ تَجِدُوهُ عِنْدَ اللَّهِ إِنَّ اللَّهَ بِمَا تَعْمَلُونَ بَصِيرٌ ﴿2:110﴾
(2:110) (Rest assured that) Allah has full power over everything: establish the Salat and pay the Zakat. you will find with Allah whatever good you send forward for your future; Allah is watching everything you do.
Literally, Zakat means purification, growth, righteousness and blessing. It is defined in Shariah as a specific amount due in the property of Muslims to be distributed to the deserving. The obligatory character of Zakat is spelled out in Surah Taubah (9) 103:
"Of their properties, take alms, so that you might purify and sanctify them."
In the same Surah Allah makes clear the punishment awaiting those unmindful of this earthly duty and responsibility:


And there are those who hoard gold and silver (money) and spend it not in the Way of Allah: Announce unto them a most grievous penalty: On the day when heat will be produced out of that (wealth) in the fire of Hell, and with it will be Branded their foreheads, their flanks, and their backs. This is the (treasure) which ye hoarded for yourselves: Taste ye, then the (treasures) ye hoarded!
Surah Taubah verse 34.
The Effect of Zakat
The payment of Zakat formulates healthy impact on the giver, recipients, and the society at large. It purifies the assets of the giver, restrains his lust for material goods and creates in him the virtue of sharing his wealth with others; it uplifts him from a life of material pursuits to a life endowed with moral purpose.
Zakat satisfies the recipient's needs and alleviates his suffering. Poverty is an invitation to disbelief; it denies virtues. That's why Islam, instead of abandoning poor to the caprice of the rich, makes a compelling demand for its payment.
The payer pays Zakat as an act of worship while the destitute receives it as a right, without any obligation towards the payer. Zakat thus; creates love and brotherhood between the rich and the poor, it minimizes social tension and bridges the gap between the haves and have-nots, It provides social and economic security to the Muslim community and brings its member closer together. Its rewards are boundless and incalculable:




Definition of Zakat
There is unanimity that Zakat is one of the five pillars of Islam. In the legal sense it means "a right on wealth" or "the specified part of wealth designated by Allah to be given to certain beneficiaries." AL-SHAUKANI(NAYL AL-AWTAR V.6) gives the following definition: "Linguistically, Zakah means growth: one says Zakahaz­Zar meaning the plant grew. It can also mean ‘purification’; In Shariah (Islamic law) it implies both meanings. The first meaning is construed as to cause growth in wealth or as to cause more reward or as to pertain to increasing wealth, such as Is the case in commerce and agriculture. The first meaning is supported by the Tradition 'No wealth decreases because of Sadaqat.' 'God increases the reward of Sadaqat.' The second meaning is construed to imply that Zakat purifies the human soul from the vice of avarice as well as sins." Zakat is not a tax. Zakat is essentially a spiritual obligation not incumbent on those who are not Muslim. Islam associates belief in Allah With the belief in the Day of Judgment and the life in the hereafter. This extends the time horizon of Muslims beyond death. Life before and life after death are closely related in a sequential manner. Thus for a Muslim his actions consists of two parts: its immediate effect in.this life; and its later effect, in the life to come. Zakah must be defined as a spiritual-material obligation on every Muslim in possession ofa.minimum amount of wealth or more, for a period of one lunar year. The .minimum Zakah payable on monetary wealth and on gold and silveris 21/ 2%,
2. When Zakilh Becomes Obligatory
There are eight conditions (i.ons which make Zakah obligatory, some of which relate to the possessor and others to the possessions. The possessor must be:
(i) A free man.
(ii) A Muslim.
(iii) Of sound mind.
(iv) An adult.
(v) In complete ownership of his or her wealth.
(vi) In possession of such wealth which is over and above the requirements to satisfy the essential needs of the possessor and of those legitimately dependent upon him or her.
(vii) Free from debt.
(viii) In possession of a defined quantity of wealth for one complete Hijrah year.




3. Nisab: Minimum Wealth
All taxes are imposed upon financial strength of a person and calculated accordingly. Similarly in the religious law of Islam, Zakat is calculated on the wealth possessed by a person. Unless and until you reach the minimum quantity of specified wealth, the' person is not liable for the payment of Zakat. This minimum limit is known in the Shariah law as Nisab.
The person who reaches the specified minimum and over is considered wealthy enough to pay the-Zakah and in this manner, share his wealth with the poor and the indigent.
Zakah is applicable only to the following categories of wealth: Gold, Silver, Livestock and all types of Trade Goods. We will discuss the regulations governing the ownership of livestock later. Regulations governing Gold and Silver are as follows:
Gold
The possession of three ounces minimum gold or its equivalent in cash for one year makes one liable to pay Zakah at the rate of 2.5 %
Silver The possession of twenty one ounces minimum silver or its equivalent in cash for one year makes one liable to pay Zakah at the rate of 2.5 % Gold and Silver in any shape or form -jewelry, utensils etc, -all are considered as wealth and Zakah becomes payable on them if the weight reaches the minimum limit and their possession completes twelve lunar months.
N.B: Zakah of 2.5 % is payable on the minimum and whatever is in excess thereof.
Zakah on Gold and Silver and Cash or Cash Equivalents



Jewelleiy
The quality of any piece of jewellery which has to be evaluated for Zakah determined by the metal which exceeds all other metals in quantity in that particular piece of jewellery. . For example: If a piece of jewellery contains 55% gold and 45% copper then the jewellery will be regarded as gold and Zakah will have to be paid' on it as such. On the other hand if a piece of jewellery contains 55% copper and less than 50% gold, then there will be no Zakah payable on it for the jewellery will be regarded as made of copper, not of gold. But Zakah ~ have to be paid on the value of all jewellery possessed as trading stock in the course of business regardless of their metal contents. More details of this will follow. Jewelleiy:In addition to what has been written above, all jewelry made of gold or silver is subject to the payment of Zakah if the quantity reaches or exceeds the Nisab limit and remains in possession for twelve months, even if the jewellery is used every day by the owner, because gold and silver in any form is liable for payment of Zakah,
Utensils If a person possesses silver or gold plates and utensils in daily use f in his home; and their weight reaches or exceeds the minimum Nisab limit then Zakah will have to be paid on them at the end of every twelve months.
Clothes irrespective of cost and quantity, are exempted from payment of Zakah, But if they have gold or/and silver embroidered or thread work on them, and the weight of gold and/or silver metal used therein reaches or exceeds the minimum Nisab limit, then Zakah will have to be paid on that portion alone at the end of every t. twelve months.
Cash In the period when gold coins were freely used and silver coins really contained silver, the calculation of Zakah on them was easy, but now that gold and silver coins are hardly ever used in currency, the amount of money possessed which could purchase the minimum Nisab quantity of the metal will be regarded as possession of the Nisab for the purpose of paying Zakah, In this estimation, the interest of the poor who benefit from the Zakah should be safeguarded as follows:
Ascertain the amount of money required to purchase three ounces of gold and the amount required to purchase twenty one ounces of silver. The least of the two amounts should be considered as the minimum Nisab limit.
Currency notes Currency notes are papers signed by a treasury official promising the payment of face value to the holder. If a person possesses the amount of money in paper currency with which he can purchase the quantity of gold or silver required to reach the minimum Nisab limit then he becomes liable to pay Zakah at the end of each twelve months.
Cash plus silver and gold Ifa person possesses ten ounces of silver, which is less in quantity than the required minimum Nisab, but the person also possesses cash money enough to purchase eleven ounces of silver, then he would be considered as having reached the Nisab limit and he will beliable to pay Zakah,
The same rule will apply to the case of possessing gold below the minimum Nisab limit, plus cash enough to purchase the remainder quantity of gold to reach the Nisab limit.
Income from Fixed Property
If a person earns income from a fixed property but the whole amount of the income is spent in the course of the year, then he does not become liable to pay Zakah, But if he has a portion saved which he has put aside, and if this saving reaches or exceeds the minimum Nisab limit, then he will be liable to pay Zakah on it if the amounts remains in his possession for twelve months.
Possessions on which Zakat is applicable
Just as the payment of Zakah is not obligatory -Fard -upon every person, so are the regulations of Zakah not applicable to every kind of possessions. Zakah is applicable only to possessions defined by the 'Shariah law as wealth and such possession must reach a certain minimum limit Nisab -and it must remain in the possession of the owner for one year before the payment of Zakah becomes obligatory.
Thus gold, silver, livestock that graze and commercial merchandise-trade goods-eome under the application of the laws relating to Zakah, Except for these there is no Zakah on any other type of possessions such as buildings, harvests, utensils (except those made of gold or silver). Furniture, clothes, etc..
Zakah will have to be paid on anything bought in the course of trade or investment including buildings, livestock, and utensils. ,clothing, etc.,
Precious Stones,
There is no Zakah on-pearls and precious stones, provided they are not for trade or investment-The owner of precious stones bought in the course of trade or investment will become liable for the payment of Zakah on them.
Income from Rent
If a person owns buildings other than those used for his own or his dependents’ occupation, and he has rented them to others then he will have to pay Zakah on the nett income from the rent, provided the income is above the minimum limit Nisab and remains in his possession for one year. There is no Zakah on the value of the buildings concerned but only on the net income earned from them.
The Zakah on the investment properties has to be paid i.e. other than owned for other than self-use.



'Trade Vehicles
The value of any vehicle such as motor cars, vans, trucks, carts, wagons, boats, etc., used in the course of trade, to earn a living is exempt from the obligations of Zakah. But the nett income earned from their use, which remains with the owner for a year, will be subject to the payment of Zakah.
Zakah is payable at the rate of one fortieth or 21/2% on the possession of wealth in the shape of gold, silver; merchandise and cash. Household effects such as furniture, crockery, personal clothing, etc., are generally exempted from the application of Zaklih~'
What to give as Zakah
Zakah must be given on, and from, a commodity, that is, a portion of the wealth itself could be given in charity to discharge the obligation. But we are permitted also to determine the Zakah due and give its value in cash. For instance, if someone has forty ounces of gold then he will have to give one ounce of the gold in charity as Zakah but he can give instead the value of the gold concerned in cash, or in goods, if he likes
Farmlands
There is no Zakah on farmlands owned by a person, irrespective of the amount of their value or size, provided they are not bought for speculation. ( Zakah in this case is called Ushra, and it is paid on produce and has different law on how much and when to be paid.)
Zakah on Trade Goods
The capital involved in the goods owned for trade or commerce is subject to the payment of Zakah, that is: If a person began trading with a'capital of £1000,and earned profits thereon then he will have to pay Zakah on the total capital, and not only on the profits earned. Therefore, a person having a capital of £1000 and earning £1000 profits in the course of the year will have to pay Zakah on £2000¬(capital plus profit) -which will be the total amount reflected as his capital in the Balance Sheet.
Kind of Trade Goods
Anything, goods, properties, precious stones livestock’s, etc., bought and sold in the course of trade is liable to the payment of Zakah. For example: There is no Zakah on precious stones or copper goods if acquired for one's own use, but if these are bought and kept in stock in the course of trade then Zakah will have to be paid on them.
Nisab on Trade Good's
The determination of the minimum Nisab on trade goods will be according to the value of goods in cash which could purchase twenty one ounces of silver or three ounces of gold. As explained before under the "Earnings in Between the Year", all increases by profits derived in the course of the year will have to be added to the capital standing at the beginning of the year and Zakah calculated on the total increased capital standing at the end of the year.
Zakah on Partnership Earnings
When trading in partnership or owning rent producing properties in partnership, each partner will be liable to pay Zakah on the proportion of the net share of profits coming to him which is added to his capital.
Zakah on Shares
Zakah on Shares owned shall be determined annually on the cash realizable market value of the Shares which must be included in the Capital, and Zakah paid on the total as required by Islam.
Debt Must Be Deducted
Persons who buy goods on credit for the purpose of trade must deduct the total amount of their debts and determine their nett profits, and add these to their capital for the purpose of calculating the payment of Zakah.
Discharging the 'Duty of Zakah
The payment of Zakah is an obligatory duty which has to be discharged in accordance with the conditions imposed by Islam. Just as performing Salah without Wudu, is null and void, so will the payment of Zakah become null and void if anything relating to it is not observed as prescribed by Islam. All the conditions attached to the determination and the discharge of Zakah must be observed, such as:
(i) The niy-yah or intention must be expressed.
(ii) The receiver of Zakah must become the owner of the Zakah given to him.
(iii) Zakah must be given to the type of persons' specified by Islam.
(iv) Zakah cannot be given in return for services received
The making of Niy-yah The person giving the Zakah must have a clean Niy-yah or intention of giving the Zakah in order to discharge his duty.
Indirect payment of Zakah If a person gives money to someone with the request to distribute it among the poor and makes the Niy-yah of Zakah then his obligation will be discharged, although the person to whom the Zakah money is given for distribution was not told that the money was in payment of Zakah, Similarly, if a person gives Zakah money to some good person and requests him to distribute the money among the poor, the duty of Zakah will be discharged when the person who has been given the money, gives it out to the deserving poor as requested to do so.
To set aside Zakah money If someone sets aside Zakah money he has to pay and from it continues to pay to deserving persons, then his duty to pay Zakah will be discharged, and it will not be required of him to make fresh niy-yah every time he gives out an amount from the money set aside.
To give Zakah without the niy-yahIf a person has wealth on which Zakah IS obligatory, and he distributes among the poor more money than he is liable to pay as Zakah but he did not make niy-yah of paying Zakah.fhen the obligation of paying Zak~h will remain undischarged, because he gave away money without the intention of paying Zakah. To express niy-yah -intention -is therefore extremely necessary.
To give away everything If a person who is liable to pay Zakah does not discharge the duty, but gives away the whole or part of his wealth to charity in general, then, in doing so he will not get released from the obligation of paying Zakah, because he did not have the niy-yah or the intention of giving Zakah. Although he will not become liable to pay Zakah thereafter if his wealth does not reach the minimum Nisab limit, but the non-payment of Zakah which became due when the possessed wealth will remain a religious debt upon him. He will of course, receive reward for the charitable act of giving his wealth to the poor.
An important condition on of the discharge of Zakah is that the receiver must become the unfettered owner of the amount of Zakah paid to him.
Zakah cannot be given to a masjid
Zakat Given As a Loan
If someone gives Zakah money to a person as a loan but he makes 'the niy-yah of Zakah, then the obligation of paying Zakah will be discharged. He cannot thereafter, collect the money given under the pretext of giving a loan. .
Zakat Given As a Gift
If a person deserving Zak ah is feared to be embarrassed in accepting it, then Zakah money could be given to him as a gift or a present on a suitable occasion; but the intention of the giver must be of Zakah at the time of giving the money. Similarly, to giveZakah money as a gift to the children of the poor is also permissible.
To Whom Zakah Must Be Given
The Holy Quraan makes specific reference tothe headings under which Zakah money must be spent:
Fuqara: The poor
Masakin: The needy
Those whose possessions do not reach the minimum (nisab )limit.
To those whose earnings are not enough to satisfy the essential needs of themselves and their dependents. (First preference should be given to relatives.)
Amilun :
Those engaged in the collection and distribution of Zakah through a community organization or Bait.az-Zakah
Mu-allafatu al-QuIub:
Those whose hearts are made to incline towards truth -the converts who need help those whose hearts are inclined towards the truth means converts to the religion of Islam; If they are in need, of assistance for their rehabilitation in the new religion, then Zakah money could be used to assist them.
Riqa
Ransoming of captives, wherever such necessity arise
Gharimun: The Debtors
A person whose total liabilities exceed his total assets, is a debtor, and Zakah could therefore be given to him.
Ibn as-Sabil: The wayfarer
The traveller who is not poor, but finds himself stranded abroad without funds. Way farer means any traveller who finds himself in financial difficulties.
Fi Sabi-lillah Those engaged in the way of Allah
Those engaged in the way of Allah, is a term which jurists generally apply to those who are actively engaged in fighting for the defense of Islam in the battlefields, but in this category could be included:
(i) Those who are engaged in acquiring religious education and who cannot afford the requisite expenses, such as tuition fees boarding, lodging, clothes, etc.
(ii) Those who are engaged in missionary work for the propagation of Islam without receiving any payment for their services, and/or they are able to maintain their families with great difficulty.
(iii) Those who are engaged in the work of imparting knowledge of Islam – and are poor teachers, through educational centers such as Madarasa or schools, but who do not receive adequate salaries to maintain themselves and their families. Those could be assisted from Zakah funds and sums given to them -not as salaries but as gifts or bonuses -without the need to tell them that the money comes from Zakah.
(iv) Those who are poor students in secular schools and colleges. Money from Zakah funds could be given to them for fees, text books, boarding and lodging expenses, for clothes, etc..
Zakat on Livestock
Zakah is payable only on the ownership of animals grazing on the farms. Animals which do not graze but are fed in close stables, cowsheds or pens and such enclosures, are exempt from the payment of Zakah. Animals who are underage are totally exempt from the payments of Zakah, Nor is there Zakah on the ownership of such animals which are used for riding, for farming and/or for any other purpose connected with the earning of a living or recreation. Motor cars, vans, Lorries, carriages, etc. kept for personal use or for use in the course of business or profession are exempt from the payment of Zakah,
The first claim on .Zakah money is of deserving relatives then the deserving poor of the village, town, city or country in which you live. If the needs of people of another area are more deserving and urgent then Zakah could be sent to them too. If the giver is not s~ and isdoubtful about the position of the person seeking Zakah from him, then he should not give his Zakah to him at all, because the giving of Zakah in such circumstances is not permitted.

Fitrah At a Glance
What is Fitrah?
Fitrah is compulsory on every Muslim who has sufficient for himself and his family-or dependents for the day of Id. He should discharge his Fitrah in respect of himself and all those who are dependents upon him such as his wife, his children .and Muslim servants.'
To whom can Fitrah be given?
Fitrah must be given to the poor and the needy of the Muslims. It may not be given to one's mother, father, paternal and maternal grandparents, great-grand-parents, etc. Similarly it may not be given to one's offspring such as sons, daughters, grand-children, great-grand-children, etc..
When does Fitrah become payable?
According to Imam Shafii, Fitrah may be given from the first day of Ramadan. According to Imam Abu Hanifah, Fitrah may be given even before Ramadan. According to Imam Malik and Iman Ahmad, Fitrah may be given a
" day or two before Id. ".
It is clear, however, from the tradition narrated by Ibn Abbas that Fitrah must be discharged before the Id Salah for it to be valid and accepted.