How to Calculate Zakat on Gold and Property in 2022

How to calculate Zakat in 2022 according Islamic laws | To Calculate Zakat on Gold and Property in 2022

Zakat is one of Islam’s five pillars, and Muslims are required to pay it every year. If you are a Muslim with a certain amount of wealth, you must understand the significance of paying Zakat. The amount you must pay is determined by your property, assets, wealth, and jewelry. If the fixed financial criteria, or ‘nisab,’ are met, a certain amount of money is to be given to the less fortunate. In Islam, the criterion is detailed, and every Muslim is required to follow its rules. This article will go over how to calculate Zakat on gold and real estate.

How to Calculate Zakat on Gold and Property
How to Calculate Zakat on Gold and Property in 2022

How to calculate Zakat in 2022 according to Islamic laws

Objective

Zakat is a method of dividing wealth in society and a way for Muslims to cleanse and purify their wealth in a way that Allah has devised. A Muslim gains Allah’s favor and helps the needy by paying Zakat. This lowers the value of money and assets in the eyes of Muslims, and obtaining Allah’s reward becomes their top priority.

Zakat, in addition to providing personal benefits in the afterlife, ensures the needy’s societal well-being and prosperity. You must also pay Fitrana to the needy ahead of Eid-ul-Fitr.

How to Calculate Zakat on Gold and Property

A Muslim’s jewellery and property are examples of tangible assets that are included in the financial criteria (nisab) for which Zakat is required. The nisab is the smallest amount of wealth that the owner can keep for at least a year. The nisab for 2022 has been set at Rs. 88,927, which means that if you own this amount, you must pay Zakat this year.

The nisab is equivalent to 3 oz. of gold (87.48 g) or its cash equivalent under the gold standard. In the case of silver, it is 21 oz. (612.36 grammes) of silver or its cash equivalent. The prices of gold and silver fluctuate, so it is best to check the most recent rates before calculating Zakat.

Applicability of Zakat on Property

The Zakat that must be paid on the property is solely determined by the nisab. The method and criteria for property tax, on the other hand, are completely different from those for Zakat. Zakat does not apply to all types of property, and it is important to understand which types of property are subject to Zakat payment. Zakat is usually levied on properties that will be resold or rented in the future. Simply put, these are all the capital assets that generate profit and income that is subject to Zakat.

Land That is to be Sold

When a plot of land is purchased with the intention of reselling it, it is considered a commercial asset. The property’s Zakat liability is determined by the property’s current value and the owner’s Zakat date.

Building for Sale

Zakat will also apply if a residential building is being built for the purpose of resale. The money you receive for the portions you sell is subject to Zakat at a rate of 2.5 percent on the day the money is received. This money is now part of your wealth and will be subject to Zakat in the usual manner.

Plots

Plots purchased for the purpose of building rental houses are not subject to Zakat, but they must be paid from rental income, just like any other income, if it exceeds the nisab criteria. Furthermore, if you own agricultural land, it is exempt from Zakat, and any savings generated from the land are subject to Zakat in the same way as regular income.

Zakat Calculation on Property

To calculate the amount of Zakat you must pay, you must first understand the value of your assets as well as the nisab requirement. Here are the steps you can take to figure out how much Zakat you owe on your property.

Begin by reviewing and calculating all of your assets and money. To get a clear picture of your nisab, list all of the property and cash you’ve owned for a year or more.
Then, take the total value of your assets and multiply it by 2.5 percent. The resulting value is the Zakat.

Zakat on Gold

Calculating Zakat on gold or any other type of jewelry is often thought to be difficult, and people are often perplexed about how much they should pay for their gold or silver. You can pay (in cash) the market value of 2.5 percent of the weight of the jewelry.

If your jewelry is made of a combination of metals, you are only required to pay Zakat on the gold and silver.

Zakat can also be paid in gold or silver. If you own 100 g of gold jewelry, you can pay Zakat on 2.5 g of it. Gold and silver, on the other hand, must be weighed separately before being given as Zakat.

To Whom Should Zakat be Given?

The following are clear instructions from the Quran regarding the distribution of Zakat:

  • Poor people are those who do not have the means to earn a living.
  • People in need: those who are unable to meet their basic needs.
  • Collectors of zakat.
  • Muslims who have recently converted to Islam.
  • Travelers who are stranded.
  • People who devote their lives to a religious cause.
    Slaves.
  • Individuals who are in debt.
    This article attempted to explain the calculation and requirements of Zakat in detail. If you have any questions, please leave them in the comments section and we will do our best to answer them.

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