by admin | May 25, 2021 | Opinions
By M S Shabbir
Ramadhan is a holy month for 170 million Muslims who spend their wealth in charitable causes and consider this deed as not an expense item although it certainly reduces one’s available cash flow. This spending on the poor and needy is an investment in the Pious Deeds Deposit Account. Zakat is the right of the poor to the wealth of the rich, a right bestowed by the true Owner and Giver of wealth.
Zakat is obligatory on all adults who possess wealth above the minimum threshold with complete ownership and free to use and has completed a full lunar year No zakat is due on wealth before one year from the date of acquisition. Since it may not be practical to record the dates for determining the holding period it is advisable to fix a date for computation irrespective of date of purchase or sale. If a large amount of money is received just before the zakat was due for the year it should be included for calculation purpose. Care should be taken to calculate zakat for the additional 10 days being difference between Gregorian and lunar calendars.
Zakat is not payable on investments made in minor’s name, only if encashment will be made on their attaining maturity. Things like the home you live in, vehicles in use and other properties purchased for personal use need not be included for zakat calculation.
EPF being a compensation for service can be deducted in calculation. However, VPF and ELSS whose nature is that of voluntary savings for tax planning purpose need to be included for zakat calculation.
Any long-term debt such as mortgages, soft loans for industries taken for economic development of the country the non-interest or principal portion only of the forthcoming lunar years’ worth of payments can be deducted for zakat calculation purpose. However, zakat is payable on the EMI of long-term debt.
Goodwill amount is considered as consideration for handing over possession and therefore zakat is payable on such amount. Zakat is not payable by both lessor and lessee on long duration lease deposits. As against this, lease deposits for short durations is to be included for zakat payment.
According to shariah, zakat is payable only on gold and silver. Precious stones like diamond are exempted. Most of the scholars have changed their view and now opine that these items are being bought as securities and therefore diamonds and precious stones imbedded as part of jewelry may be excluded but their valuation be included if purchased for security reasons.
Zakat is payable on all purchase of real estate be it plot or building, shares or any other stock-in-trade with an intention to trade. If shares are purchased for transfer to next generation and not traded, then zakat is payable only on dividend amount. For zakat, investment in retirement plans are to be considered as part of net worth.
Zakat is 2.5% of total wealth and must be paid with the intention of paying zakat. If one gives any other charity, it cannot be counted as zakat if it did not carry the necessary intention. It is believed that each person shall be held responsible for his / her intentions, actions and behavior throughout their lifetime and each of these is being recorded in a Book of Records.
One should not equate zakat with taxes paid to the government nor deduct taxes before calculating zakat unless these taxes are overdue and are required to be paid immediately to the government. Taxes that we pay to government are in no way a substitute to zakat because zakat must be distributed to specific groups of people who are Monotheists.
One question which most people ask is whether cost price, sale price or market price is to be taken for calculation of zakat. It is preferable to take the market value although the sale price may be lower more often.
(The writer is an Investment Advisor and Managing Director of SenSage Financial Services Pvt Ltd)
by admin | May 25, 2021 | Halal Food, Halal Industries
How can smoking be Halal in Islam, a System meant for healthy Life?
Dr.Javed Jamil
By Dr. Javed Jamil
Ramadhan can and should be the best time to give up all forms of addictions including smoking forever. I will focus here on smoking only because while alcohol and drugs are considered Haram by all the religious experts of Islam, unfortunately, smoking has not yet been declared universally Haram. This is despite the fact that smoking kills and devastates much more than the other addictions.
It was in late 1980s when this writer had authored an article “Why Cigarette Smoking should be declared Haram” It was published first in Radiance and was then republished in many other magazines and newspapers including The Kuwait Times. Subsequently, certain religious scholars in Egypt had issued an edict about Cigarette smoking being Haram. But unfortunately, the movement did not pick up, and smoking continues to be a major health hazard not only in the world as a whole but also in Muslim countries including the Arab world, Iran and Malaysia. Muslims tend to consider it permissible.
Let us first see how much important health is in Islamic system of affirs. The truth is that Islam is meant for protecting life, booth in this world and the Hereafter, keeping it healthy and ensuring the highest standards of healthiness. We will see below that Islamic permissions and prohibitions are largely dependent on the impact of the practices on health. In fact, while Islam gives maximum importance to health, the current world order compromises health for the sake of economics.
Health is arguably the most important gift of nature to man. Prophet Muhammad (SAW) has also described well-being as the biggest gift of God to humans. Without health, life becomes an unmeaning burden. But to maintain health requires exactly what the current world dominated by market fundamentalists loathe: discipline in life with plenty of restrictions on activities. The worship of Hygeia is not tolerable for Mammon. “Restrictions” and “prohibitions” are words that do not exist in the lexicon of the bazaar. Health is also or must be perhaps the most easily recognisable criterion of right and wrong. In the simplest terms, right and wrong can be defined thus: what has a good overall impact on health is good, and what has a bad overall impact is bad. This definition can create some complications; but it holds good for most of the cases. Health itself is a comprehensive state of well being. Normally, it is defined in terms of physical, mental and social well being, with spiritual well being added as an essential constituent recently. Ideally this includes family health as well. This is essential for family is an organised unit of society comprising individuals. A person, male or female, child, young or old, is an individual, a member of the family and a member of society.
Consequent on the blind race for money, what has suffered most is health – physical, mental, spiritual and social. While medical scientists have been perpetually engrossed in efforts to find out the aetiologies and remedies of various health problems, magnates have been relentlessly engaged in popularising whatever suits their interests, irrespective of their impact on human health. And the tragedy is that medical scientists too have lately become mere tools in the hands of industrialists. They sometimes resist. But, subdued as they are in disposition, at the most their viewpoint is published only in medical journals. If at all it becomes public, merchants find alternative ways to submerge it into oblivion. The medical world is not dynamic enough to aggressively push its concerns. The problem has further been compounded by the privatisation of medical institutions and research laboratories. The industries are now buying medical specialists for their own ends. They have the money power to lure experts who too seem to have found a heavenly haven in the garden of materialism.
Islam classifies human acts into following categories:
(1) Halal (Permissible), without being obligatory or desirable;
(2) Fardh (obligatory);
(3) Mustahab (Desirable), without being obligatory;
(4) Haram (Prohibited):
(5) Makruh (undesirable) without prohibited.
This categorisation is extremely important; this, in fact, makes the Islamic Shariah the most scientific system of the world. It also gives certain flexibility to the Shariah, which makes life easy for even those having weaker convictions.
The Qur’an itself declares that it allows what is good and forbids what is bad. Now, when we study various prohibitions and obligations in Islam on the basis of the till now available scientific knowledge, we find the categorisation of acts, where they are related with health, to be based on the following principles;
(1) Islam declares all those items and practices prohibited which do not form parts of the normal requirements of the body and can directly lead to the development of a disease which more often than not becomes fatal or causes physical handicaps like blindness, paralysis, etc.
(2) Islam declares all those items and practices makruh or undesirable, which may harm the health but are neither usually fatal, nor lead to any physical handicap like blindness, paralysis etc.
(3) Islam declares all those things Mustahab or desirable that have beneficial effect on the health of the individual or society in general.
To explain the medical basis of prohibitions, let us concentrate on the prohibition of alcohol, sexual freedom and pork and the undesirability of eating the flesh of cow.
Let us first take the case of alcohol. To describe its toxic effects requires hundreds of pages. To be very concise, the drinking of alcohol causes a number of diseases the chief ones being Cirrhosis, Pancreatitis, Alcoholic Neuropathies, Psychosis, etc. Out of these, Cirrhosis in an incurable fatal disease having no treatment till now in any of the systems of medicine. Thousands of persons die every year of alcoholism. Apart from being dangerous medically, alcoholism is perhaps the biggest familial and social problem of the world that leads, directly or indirectly, to serious disturbances in the families, suicides, murders, rapes and accidents, causing heavy damage to the life and property.
Similarly, pork, prohibited in Islam, is known for giving rise to Trichinelliasis, caused by Trichinella spiralis and Taenaiasis, caused by Taenia solium. Trichinella and also sometimes Taenia solium (when it makes human body its primary host) enter the blood circulation and in a number of cases cause paralysis, blindness or sudden death. Interestingly, the other species of the genus Taenia, namely, Taenia saginata found in cow’s meat does never make human being its primary host and therefore does never enter the blood circulation. It remains confined to the intestines causing much less harmful diseases like anaemia. This must be the reason behind the Prophet’s (SAW) hadith that while the milk and ghee of cow are good, its meat has disease. So it was not prohibited outright but disliked by the Prophet (SAW).
Pork in addition has an indirect highly dangerous implication on health due top pig farming. Swine flu caused by contacts with pigs has killed more than 150 million people in the last two century.
Free sex, advocated by the Western society is also directly responsible for many dangerous diseases of which syphilis in the past and AIDS at the present have been responsible for millions of deaths. Free sex is also one of the major causes of the psychological, familial and social problems leading to crimes like murders and rapes and familial problems like separations and divorces.
Out of the desirable acts in Islam, circumcision, breastfeeding for two years and cleansing of teeth may be cited here as acts of extraordinary medical, significance. Circumcision prevents fatal diseases, namely, Cancer of Penis in the males and Cancer of Cervix in the females and Muslims rarely suffer from these. It has been proved that AIDS in circumcised men are much less than in the uncircumcised. Cleansing the teeth, which the Prophet did practice before every namaz, prevents dental diseases like carries, pyorrhoea etc. Breastfeeding for two years has been proved to have a significant positive effect on life expectancy. All Islamic practices of Fardh and mustahab in fact have beneficial effect on life expectancy, and all prohibited practices have a pronounced depleting effect.
In the book, “Quranic Paradigm of Sciences & Society” (First Volume: Health”, I have developed a Quranic dynamic paradigm of health. While the WHO Definition of Health describes health as “a state of complete physical, mental, social and spiritual being” with the onus of maintaining health only on individuals without fixing the responsibility of maintaining health on system, Islamic definition of health, developed by this writer, is much broader:
“Health is a state of complete physical, mental, spiritual and social wellbeing, which must be safeguarded not only through the maintenance of a health preserving regime at the personal/individual level, but also through the establishment of a health-protective and promoting family system and a health-protective and promoting social system.”
It is on the basis of this definition that I have advocated Right to Health as a Fundamental right. When the right to health becomes a fundamental right, smoking, drinking and uninhibited sex would automatically become unlawful; for each one of these is responsible for increase by millions in the annual mortality and morbidity. This will result in a momentous fall in the incidence of diseases like lung cancer, mouth cancer, cirrhosis, ischaemic heart diseases, peptic ulcers, bronchitis, Korsakoff psychosis, syphilis, gonorrhoea, Chancroid, herpes, AIDS and a number of psychiatric diseases. The crime, accident and suicide rates would also decline substantially.
Quran clearly points that God has allowed all wholesome things and banned all unhealthy and unhygienic items and practices. Quran has also clearly asked not to put oneself in situations causing death:
“And spend in the way of Allah and do not throw [yourselves] with your [own] hands into destruction. And do good; indeed, Allah loves the doers of good.” (Al-Baqara, 2: 195).
“O you who have believed, do not consume one another’s wealth unjustly but only [in lawful] business by mutual consent. And do not kill yourselves. Indeed, Allah is to you ever Merciful.” (Al-Baqara, 2: 29).
It is clear that Quran prohibits anything that endangers life. How can then smoking be Halal? Some people argue that smoking does not cause the fogging of mind or intoxication like alcohol and drugs. They forget that it is threat to life and not the fogging or intoxication which is the primary criteria of prohibition. Pork, meat of dead animals, promiscuity and homosexuality do not cause “Khumaar” but have been expressly prohibited.
There are1.3 billion smokers in the world. In an initial estimate of factors responsible for the global burden of disease, tobacco, alcohol and illicit drugs contributed together 12.4% of all deaths worldwide in the year 2000. Looking at the percentage of total years of life lost due to these substances, it has been estimated that they account for 8.9%.
(http://www.who.int/substance_abuse/facts/global_burden/en/)
It can be seen that Tobacco is a bigger killer than even alcohol. According to latest estimates, more than 6 million people are killed by tobacco compared to 3 million by Alcohol. How can such a big killer be Halal? In addition, tens of millions develop severe respiratory illness causing breathlessness and cough and crippling heart diseases. The markets earn hundreds of billions, and this comes from the pockets of the people at the cost of their own health. The Islamic scholars cannot remain sleeping over this huge hazard to life. They need to sit together and issue a categorical fatwa declaring all forms of tobacco including smoking Haram. Once they do it, the governments, at least of Muslim countries, will be under pressure to ban the manufacturing and supply of the tobacco products.
The smokers have a golden opportunity to give up smoking during Ramadhan. If they are fasting, they are keeping away from smoking for more than twelve hours in most parts of the world. Just avoid smoking after the break time for a few days, and they will find it easy to give it up forever. They must remember that addiction can be given up only through quick abandoning; attempts to do it slowly are bound to fail. The higher spiritual level in Ramadhan is more likely to help their cause. If they take it as Haram, it will be easier for them to quit. Let every smoker and tobacco chewer take a pledge to give up their addiction forever! This will be one of the biggest thanksgivings to God in the month of Ramadhan.
by admin | May 25, 2021 | Islamic Finance, News, Opinions
By Dr. Syed Zafar Mahmood,
Circulation of wealth: Zakat & Sadaqah
Bringing about economic equality through circulation of wealth in the society is one of the fundamental objectives of Islam. The instrumentality prescribed to achieve this goal is popularly known as Zakat that is considered, like Namaz or Salah, as a prescribed mode of mandated worship. Zakat is yearly donation of 2.5% of the individual’s wealth plus annual savings. The eight heads of distributing Zakat are defined in chapter 9 verse 60 of the holy Quran. These are (i) the poor, (ii) the needy, (iii) those employed to administer the funds, (iv) those whose hearts have been recently reconciled to Truth, (v) those in bondage (literally and figuratively), (vi) those who are in debt, (vii) in the cause of God and (viii) for the stranded traveler. Such deserving persons are identified and helped by individual or organized effort.
A deeper understanding of Quran, however, reveals a wider methodology of the circulatory mechanism of the society’s wealth. As against Zakat the term Sadaqah has a more far-reaching connotation. In the above-referred verse 9.60 also, the term used to indicate charity is Sadaqah though, as per general consensus, this specific verse has been accepted the world over as the divine instruction for Zakat heads. On the other hand, Sadaqah is ordinarily considered as optional charity and most of the Muslims – though erroneously – do not attach much importance thereto except sporadically giving away very small amounts (much less than one percent) of their financial holdings.
Qulil Afwa
In this context we must appreciate that if the economically higher ranked 15-20% of the community contributes only 2.5% of its wealth and savings that would not suffice to lift the remaining 80-85% of the people to a higher economic status aspiring to be in the vicinity of the one enjoyed by the top 15-20%. That is the reason why God has emphasized the significance of voluntary charity that is broadly referred to by Muslims as Sadaqah. But here is a catch. Most of us Muslims are not aware that God has also prescribed a directive principle for us to decide as to how much we should volunteer to donate as Sadaqah on top of Zakat. Here comes the principle of Qulil Afw as indicated in the Quran (2.219). Says God: O Prophet (S), they ask you as to how much should they spend in the cause of Allah; say, whatever remains after taking care of yourself and your dependents. Thus, God has minced no words in His prescription. In fact, before closing the conversation, He adds, “Thus Allah makes clear to you the verses of revelation so that you give thought.”
In this way, Islam’s mechanism of redistributing the community’s earnings and wealth begins from Zakat and completes with ‘Sadaqah to the extent of Qulil Afw’. Daily five times prayers generally consume not more than one hour of the individual. But these prayers provide the spiritual skeleton on which the human body must rest during the remaining 23 hours. Likewise, Zakat is the fundamental indicator to facilitate the comprehensive human understanding and action. The spirit of Zakat must permeate the remaining 97.5% of the individual’s earnings, savings and wealth. God says, out of that, spend on yourself and your dependents as much as is required, but whatever remains does not belong to you and must be spent on those who need to be helped. Such a matrix of compulsory and benevolent charity would keep the community economically robust. However, meshing with the broader divine mandate, it is the extent of voluntary charity that would decide the worth of the individual in the divine evaluation.
Islamic charity matrix: panoramic view
Being aware of this panoramic appreciation of Islam’s emphasis on charity yet, for purposes of linguistic convenience, naming it largely as Zakat, the world administrators of Islamic charities assembled in the Indonesian port city of Banda Aceh recently (8-10 June 2015) and mutually agreed to the core principles for Zakat’s good governance, safety net, strong legal foundation, international collaboration, risk management and financial integrity. The draft of these principles was discussed, debated and amended at the international seminar. Thus the following was agreed to.
Core principles of Zakat administration
The Zakat organizational activities must comply with the Shariah regulations (under the watchful eye of a Shariat advisory body) as well as the country’s constitutional and legal requirements; it should cooperate with the authorities concerned. Latest accounting standards and integrated tools of information technology must be deployed to collect, process, disburse, monitor and analyze the receipts and expenses. These may include Zakat, Infaq, Sadaqah and other similar religious charitable funds. The amounts pertaining to the Corporate Social Responsibility (CSR) fund may be classified as Infaq and may also be collected and managed by the same organization that should have a comprehensive internal control system. The Zakat organization should ensure standard book-keeping and preparation of financial statements in accordance with the accounting practices that are widely accepted at the national and international levels. The accounts must be annually audited. The financial statement should be issued annually to the public and should bear an independent external auditor’s opinion. The activities of the organization must be regularly reflected on its website for use by the general public. The administrators need to be properly qualified, trained, experienced and of proven integrity. All required legal reporting to the Government must be punctually complied with. Manpower must be honest, trustworthy, upright, and virtuous. They should be having character, integrity and the basic knowledge of Shari’at and financial accounting. Instances of administrative or financial indiscipline need to be firmly dealt with in time; these may include imposing fines, penalties and sanctions. The administrative and personnel cost should not exceed 1/8th or 12.5% of gross amount collected.
Trained personnel
The Board should approve, actively direct and oversee the implementation of the prescribed policy and rules and maintenance of Islamic culture and values through the prescribed code of conduct. The quality of officers needs to be ensured by insisting on proper certification and should be improved through in-service training. They should study the prevailing price index and should accordingly announce the non-zakatable exemption limit (nisab) depending upon the sources of income or the extent of property accumulation in the light of the shari’ah. It should have appropriate policy and process for regularly evaluating the various types of zakatable assets and their classification. It should make the collection proactively. And should advise regarding the period of normal Zakat donation as well as in times of disaster. It should identify the Zakat liability from new forms of wealth not known in the early days of Islam, e.g. the joint-stock company or corporation.
Consumptive & Productive Programs
The organization should formulate policies and processes for utilizing the Zakat, Sadaqah, Fitra, Infaq for the prescribed beneficiaries. It should have proper financial planning, recording and management to prevent mismatch of fund allocation. The donated amount should be utilized for both consumptive and productive programs. Consumptive programs aim to fulfill short term basic needs of mustahiks (deserving persons) while productive programs aim to empower the mustahiks to cultivate long term socio-economic resilience. The inter se proportion of consumptive and productive programs should be periodically decided on the basis of socio-economic and environmental analysis of the area of operation. The organization should aim at targeted higher reading of the social benefit indicators that must be achieved in the planned timeframe.
Priority scale & Hadd-al-Kifayah
The Zakat organization should devise a suitable procedure to decide a priority scale of the eight prescribed heads of expenditure. The poor (fuqara) and the needy (miskeen) are the most needy groups that must be given the first priority and large amount in the distribution of zakat.
Taking into account the macroeconomic conditions of the area of operation the Zakat organization should prepare a priority scale of recipients through poverty level or the calamity impact, as the case may be. It may review the range of activities by identifying a clear definition and assessment of the eight heads of expenditure. It should have adequate socialization and education programs to enhance the public awareness about Zakat. It should adopt a standard ‘hadd-al-kifayah‘ representing adequacy to meet the individual requirements and may, for this purpose, collaborate with other similar facilities such as Islamic banking and Awqaf. The Zakat organization should have an appropriate internal process for preempting and dealing with potential fraud, technical failure of the IT system, and any other factors that are likely to vitiate the normal organizational operations.
Consensus & adoption
These core principles will also be shown to well known Islamic international bodies like the Islamic Development Bank seeking their concurrence and will then be passed on to all Islamic countries and societies to be considered for adoption and adherence.
(The contributor is the president of Zakat Foundation of India. He can be contacted on info@zakatindia.org)
