What is Zakat?
Zakat is an obligatory charity in Islam. It is due on eligible wealth when a Muslim owns wealth above the Nisab threshold for one lunar year. Zakat is usually calculated at 2.5% of net zakatable wealth. It purifies wealth and supports eligible recipients such as the poor, needy and debt-ridden.
Who must pay Zakat?
Zakat is due when a person owns zakatable wealth above Nisab and the Hawl condition is met. Hawl means the wealth has been held for one lunar year. This calculator includes a Hawl selector because Zakat is not only a percentage calculation. Eligibility matters.
What is Nisab?
Nisab is the minimum wealth threshold for Zakat. It is commonly based on 87.48 grams of gold or 612.36 grams of silver. The gold Nisab is higher. The silver Nisab is lower. Many scholars recommend silver Nisab because it is more inclusive for giving.
How to calculate Zakat
The formula is: Zakat = (Total zakatable assets – liabilities) × 2.5%. First add cash, gold, silver, investments and business assets. Then subtract debts and immediate liabilities. Compare the result with Nisab. If net wealth is above Nisab and Hawl is complete, Zakat is due.
What assets are included?
- Cash in hand and bank accounts.
- Gold and silver value.
- Stocks, mutual funds and liquid investments.
- Business inventory and trade goods.
- Receivables likely to be collected.
What is usually not included?
- The house you live in.
- Personal car and daily-use items.
- Clothes, furniture and personal tools.
- Business equipment not held for sale.
Real example
If assets are ₹5,00,000 and liabilities are ₹1,00,000, net zakatable wealth is ₹4,00,000. If this is above Nisab and held for one lunar year, Zakat is ₹10,000. If the same person is below Nisab, Zakat is not obligatory that year.
Zakat vs tax
| Feature | Zakat | Tax |
|---|---|---|
| Type | Religious obligation | Government rule |
| Rate | Usually 2.5% | Variable |
| Purpose | Charity and purification | Public revenue |
| Eligibility | Nisab-based | Income or law-based |
Source and trust notes
This tool follows commonly used Zakat calculation principles: eligible assets minus liabilities, Nisab comparison using gold or silver, Hawl check and 2.5% rate. Personal cases can differ. Jewelry, debt types, business inventory and investment rulings may vary by school of thought.
