1. What is Zakat?

Zakat is one of the Five Pillars of Islam, an obligatory form of almsgiving for Muslims who meet the necessary criteria of wealth. It's a fixed percentage (2.5%) of a Muslim's total savings and wealth above a minimum amount known as nisab.

2. How is Zakat Calculated?

The calculator uses the Zakat formula:

Where:

• \( Wealth \) — Total savings and assets (in currency)
• \( 0.025 \) — The fixed Zakat rate (2.5%)
• \( Nisab \) — Minimum threshold for Zakat eligibility

Explanation: Zakat is only payable when one's wealth exceeds the nisab threshold for one lunar year. The standard rate is 2.5% (0.025 in decimal) of the total qualifying wealth.

3. Importance of Zakat

Details: Zakat purifies wealth, supports the needy, and promotes economic balance in society. It's both a spiritual duty and an economic tool for wealth redistribution in Islam.

4. Using the Calculator

Tips: Enter your total wealth in dollars and the current nisab value (default is $400). The calculator will determine if you're eligible to pay Zakat and calculate the amount due.

5. Frequently Asked Questions (FAQ)

Q1: What is included in wealth for Zakat calculation?
A: Cash, gold, silver, investments, business inventory, and other liquid assets after deducting immediate debts.

Q2: How often should Zakat be paid?
A: Zakat is due annually after one lunar year of holding wealth above the nisab threshold.

Q3: What is the current nisab value?
A: Nisab is typically the value of 87.48 grams of gold or 612.36 grams of silver. The calculator uses $400 as default but this should be updated to current values.

Q4: Are there different rates for different assets?
A: The standard rate is 2.5% for most assets. Agricultural products and livestock have different rates.

Q5: Who is eligible to receive Zakat?
A: The Quran specifies eight categories including the poor, needy, those in debt, and travelers in need.