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Zakah on Cattle and Other Animals

Conditions of Zakah on Cattle
There are some conditions that Zakah on cattle is not due unless all of them are realized. These conditions were laid down with the aim of easing restrictions on the owner, so that he gives Zakah willingly. Thus, Zakah achieves the noble aims for which it is ordained. These conditions are:

1. Reaching the Nisab The minimum amount (Nisab) of camels counted for Zakah is five camels. While no Zakah is due on less than forty sheep, the minimum amount of cows counted for Zakah is thirty.

2. The lapse of a full year This implies that Zakah is not due unless the property remains in the possession of its owner for a full year right from the day it reaches the minimum amount counted for Zakah. This is confirmed by the Prophet's hadith in which he maintained, ''Zakah is not due on a property unless after the lapse of a full year.'' In case the cattle bear offspring during the year, the value of the offspring is to be added to the total value of cattle. If the possession is interrupted during the year due to selling cattle or bartering them, a new year is to be calculated from the day in which the cattle are sold or bartered, provided that the owner did not do that with the intention of evading the payment of Zakah.

3. Cattle should not be exploited in cultivation Cattle exploited in cultivation are not counted for Zakah. This is confirmed by the Prophet's saying, ''Nothing is due on the cattle used in cultivation.''

The Percentage and Amount of Zakah

Zakah on camels

The Nisab and amounts of Zakah due on camels are illustrated as follows:
No. of Camels -The amount of Zakah due
From 1 To 4 -> No Zakah is due
From 5 To 5 ->One sheep
From 10 To 14 ->Two sheep
From 15 To 19 ->Three sheep
From 20 To 24 ->Four sheep

While there is Zakah due on camels numbering from 1 to 24, giving some of them as Zakah may affect the payer negatively, so giving sheep as Zakah is made as compromise.

No. of Camels -- The amount of Zakah due
From 25 To 35 ->A she-camel between 1 and 2 years
From 36 To 45 ->A she-camel between 2 and 3 years
From 46 To 60->A she-camel between 3 and 4 years
From 61 To 75 ->A she-camel between 4 and 5 years
From 76 To 90 ->Two she-camels between 2 and 3 years
From 91 To 120 ->Two she-camels between 3 and 4 years
From 121 To 129 ->Three she-camels between 2 and 3 years
From 130 To 139 ->A she-camel between 3 and 4 years and two she-camels between 2 and 3 years
From 140 To 149 ->Two she-camels between 3 and 4 years and a she-camel between 2 and 3 years
From 150 To 159 ->Three she-camels between 3 and 4 years
From 160 To 169->Four she-camels between 2 and 3 years
From 170 To 179 ->Three she-camels between 2 and 3 years and a she-camel between 3 and 4 years
From 180 To 189 ->Two she-camels between 2 and 3 years and two she-camels between 3 and 4 years
From 190 To 199 ->Three she-camels between 3 and 4 years and a she-camel between 2 and 3 years
From 200 To 209 ->Four she-camels between 3 and 4 years or five she-camels between 2 and 3 years

Any increase beside the above-mentioned amounts is to be calculated as follows:
1. On every increment of 40 camels, a she-camel between 2 and 3 years is due as Zakah.
2. On every increment of 50 camels, a she-camel between 3 and 4 years is due as Zakah.

Zakah on cows
The Nisab and amounts of Zakah due on cows are illustrated as follows:

No. of Cows --The amount of Zakah due
From 1 To 29 ->No Zakah is due
From 30 To 39 ->A one year old bull
From 40 To 59 ->A two year old cow
From 60 To 69 ->Two cows or bulls aging 1 year
From 70 To 79 ->A cow aging 2 years and a bull aging 1 year
From 80 To 89 ->Two cows aging 2 years
From 90 To 99->Three cows aging aging 1 year
From 100 To 109->A cow aging 2 years and 2 bulls aging 1 year
From 110 To 119 ->Two cows aging 2 years and a bull aging 1 year
From 120 To 129 ->Three cows aging 2 years or four bulls aging 1 year

Any increase beside the above-mentioned amounts is to be calculated as follows:

- On every increment of 30 cows, a cow or bull aging 1 year is due as Zakah.

- On every increment of 40 cows, a cow aging 2 years is due as Zakah.

Zakah on sheep
The Nisab and amounts of Zakah due on sheep are illustrated as follows:

No. of Sheep --The amount of Zakah due
From 1 To 39 ->No Zakah is due
From 40 To 120 ->A ewe
From 121 To 200 ->2 ewes
From 201 To 399 ->3 ewes
From 400 To 499 ->4 ewes
From 500 To 599->5 ewes

- On every increment of 100 sheep, a ewe is due as Zakah.

Cattle Raised for Trade

The cattle raised for trade will be treated exactly as the commercial commodities; Zakah on them will be calculated on the basis of their value not number. Therefore, Zakah falls due on the cattle if their value reaches the minimum amount of money liable to the payment of Zakah (a value equal to 85 grams of pure gold). In this case, the cattle owner should add it to what he possesses of money and commercial commodities and pay 2.5 % as Zakah on it provided that it meets the conditions of the obligation to pay Zakah on commodities. However, in case the value of cattle does not reach the minimum amount counted for Zakah when estimated as commercial commodities, but do reach it when estimated on the basis of their number, the numerical method explained earlier is to be applied.

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Zakah on Crops and Fruits

Fruits and Other Crops Counted for Zakah According to Abu Hanifah and other jurists who stuck to the outward meanings of the related Qur'anic and Sunnah texts, Zakah is due on all crops and fruits grown with the aim of investing the arable land. A Qur'anic verse says, "O ye who believe! Give of the good things which ye have (honorably) earned, and of the fruits of the earth which We have produced for you." (Surah Al-Baqarah No.2, Verse: 267). The Prophet (peace be upon him) said, "One-tithe is due as Zakah on plantations irrigated by the water of rain or springs, or which draw water from the inner layers of the earth (by its roots), and half of one-tithe is due as Zakah on the plantations irrigated by tools." However, plants that grow without human efforts, such as wood trees, grass, reeds ... etc. are not counted for Zakah, unless they are intended to be invested in trade. In such case they will be treated in the same way as commercial commodities.

Zakah on Agricultural Products Agricultural products are not counted for Zakah unless they are intended to be invested in trade. In such case they are treated in the same way as the commercial commodities.

The Amounts of Crops and Fruits Counted for Zakah According to a genuine hadith, "A quantity less than five Wasqs is not counted for Zakah." Now the five Wasqs equal 653 Kilograms of wheat or other grains. The payer of Zakah should pay attention to the various weights of the different kinds of foodstuff. The Nisab of dried food should be calculated after not before the process of drying is complete.

The Time When Zakah on Crops and Fruits Falls Due Unlike other kinds of property, Zakah on crops and fruits does not become due after the lapse of a full year since reaching the Nisab. Rather, the determining factor here is the agricultural season and the crop. This is confirmed by the Qur'anic verse, "But render the dues that are proper on the day that the harvest is gathered." (Surah Al-An`am No. 6, Verse: 141). Thus, Zakah will be due on each crop produced by the land at the same year. The time when Zakah on crops and fruits becomes due begins when they are ripe. However, crops and fruits should first be gathered and piled in the threshing floor. Thus in case the yield is wasted before piling, unintentionally or due not to negligence, no Zakah is due on it. Zakah on crops and fruits, however, is due on the owner who sells the ripe yield of his land or gives it in donation or the one who dies after the crops are ripe. But in case the owner dies before the crops are ripe, Zakah will be incumbent on the buyer or the donee or the heir of the owner.

The Estimation of Zakah on Crops and Fruits The amount of Zakah payable on crops and fruits varies according to costs spent and effort exerted in irrigation as follows: - In case of costless, comfortable irrigation the amount of Zakah would be 10%. - In case of irrigation with the aid of a costly method, such as digging a well and bringing up water automatically, or buying water, the amount of Zakah would be 5%. - In case irrigation includes the two probabilities, the amount of Zakah would be estimated according to the major method of irrigation. But in case of equality, a fixed amount of 7.5% of Zakah would be given. - When it is difficult to decide, an amount of 10% of Zakah would be paid.

Approximate Estimation of the Amount of Zakah Due on Fruits and Other Crops Sometimes the owner of fruits and other crops has no time to estimate the yield of his land by measuring. In such case he is permitted to have this yield estimated by an expert and pay the amount of Zakah accordingly. According to Al-Awza`i and Al-Laith, this method of estimation can be applied to all kinds of fruits and crops. Estimating the amount of Zakah is carried out after the fruits and other crops are ripe, while paying it is performed after the process of drying (as in the case of dates and raisins). An amount of one-forth or one-third is to be exempted from the obligation of paying Zakah and left for the benefit of the owner. This is to be left to the expert's discretion.

The Amount of Crops and Fruits Exempted from Zakah The owner of crops and fruits is not obliged to pay Zakah on the following:

a) The amount consumed by the owner while the crops or fruits are still raw.

b) The amount consumed by the beasts utilized in cultivation.

c) The amount consumed by the wayfarers.

d) The amounts donated as a charity.

Deducting the expenditures of cultivation According to Ibn `Abbas and other jurists, all expenditures of ploughing, planting, fertilizing, and harvesting are to be deducted from the total amount counted for Zakah, provided that these expenditures do not exceed the rate of one-third.

Zakah on Crops and Fruits Produced on a Leased Land A lessee of a land has to pay Zakah on its produce of fruits and other crops. The owner of the land, on the other hand, will add the leasing value to other cash money in his possession and pay Zakah on them at the rate of 2.5%. In case the produce of land is shared due to a contract or crop-sharing (which implies that the owner appoints another person to take care of cultivating or irrigating the land in return for a portion of its yield), the Zakah is due on both parties once the yield reaches the Nisab.

General Rules Concerning Zakah on Crops and Fruits 1. Crops and fruits of like kind are to be added and estimated together, while those of different kinds, like fruits and vegetables, are to be estimated separately. 2. In case the crop varies in quality, Zakah is given on the basis of the average, but not lesser, rate. 3. The value of plantations grown in different soils are to be added together, so long as they belong to the same owner. 4. Though the owner of land should pay Zakah from the crop, some scholars maintain that it is permissible to pay it in cash according to the market value.

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Zakah on Commercial Commodities, Industry & Company:

Zakah on Commercial Commodities: This term stands for all properties owned with the aim of investing them in trade. Ownership may be realized by importing or buying from the national market. These properties include real estate, foodstuff, agro products, cattle ... etc. Also, these properties may include commodities in a shop owned by a person or more.

Difference between capital goods and commercial commodities: Capital goods denote those kept for private use, and not for trade, usually termed in accounting as fixed assets. They are utilized to bring forth production, such as machines, buildings, wagons, equipment, vessels, depositories, racks on which articles are exhibited, desks, furniture ... etc. These kinds of properties are not counted for Zakah. However, commercial commodities, termed in accounting as circulated assets, intended to be invested in trade, such as commodities, articles, machines, wagons, lands, are liable to Zakah, in case they meet the conditions of Zakah.

Conditions for paying Zakah on commercial commodities In addition to the conditions previously mentioned in Zakah on cash, there are two additional conditions:

1. Owning the commodity for return The commodity should be bought in exchange for money, or bartered for another commodity or as a substitute for a debt, whether falling due or deferred. The same applies to articles taken by a woman as dowry, or the deferred amount of dower in case of separation from her husband. However, the property owned by means of inheritance or donation, the article returned to the seller for a defect, or arable land is regarded as assets and Zakah due on it will be estimated on this basis.

2. Intention This means that the owner of a property, when first buying it, should have the intention of investing it in trade. Thus, the intention is the key factor that decides whether the property is owned for private use or for trade. Fore example, a car first bought for private use, but intended to be sold if it sells well, will not be considered a commercial commodity, thus not counted for Zakah. However, a merchant who buys a number of cars for trade but keeps one for private use, this one will also be counted for Zakah, depending on his original intention. In case one changes his mind to dedicate a commodity for private use instead of investing it in trade or vise versa, the second intention is to be taken into account.

The following activities are to be appended to commercial commodities as regards their liability to Zakah:

a) Commercial projects including purchase and sale activities carried out by small to medium businesses, speculation companies, limited or stock companies ... etc.

b) Commissioned activities carried out by brokers, middlemen and agents.

c) All kinds of money exchange and investment.

How to pay Zakah on commercial resources? When the time of Zakah falls due, the commercial body, whether individuals or companies, should make an inventory and estimate the actual value of the commercial assets and goods. The value of these goods together with the cash money and total of the recoverable debts are considered the amount of commercial resources on which Zakah is due, after leaving out the amount of debts owed by the commercial body. Zakah is to be taken at the rate of 2.5%. Imam Abu `Ubaid reported that Maymun bin Mahran said, "When Zakah falls due, a Muslim should see his property, whether cash or commodities, and estimate it in cash. If you owe debts to others, calculate their value and take them out of the total property and pay Zakah on the residual."

The rate considered upon estimating the value of commercial assets Unlike the traditional accounting method which applies the lower rate, the value of commercial assets is to be estimated according to the current market value at the time when Zakah falls due, no matter whether it is higher or lower than the cost price. As for commercial commodities, they are estimated according to the wholesale price, even though they are sold in retail. This is the view adopted by the Jurisprudence Academy in Mecca.

Should Zakah be paid in cash or out of the commodities? Originally, Zakah on commercial commodities must be paid in cash. It is reported that `Umar bin Al-Khattab (may Allah be pleased with him) said to Hamas, "'Give Zakah on your wealth.' Hamas said, 'I have no trade other than leather quivers.' Whereupon `Umar said, 'Estimate their value and pay Zakah on them accordingly.'" This is because the cash is better for the poor as it helps him meet his needs however variant. However, a merchant can pay Zakah out of the commodities in which he is dealing as a means of evading hardship and in case of recession.

Debts owed by others to a merchant These debts are divided into two kinds: 1. Recoverable debts:This is a debt owed by one who recognizes it and is able to pay, or a debtor who, though denies the debt, there is an evidence against him that in case he stands for trial he will be obliged to pay it. This kind of debts is also known as good debts. Thus, the amount of such kind of debts is to be added to the total sum on which Zakah is payable. 2. Irrecoverable debts:This is a debt owed by one who repudiates it, while there is no evidence against him, or by a debtor who recognizes the debt but often procrastinates the repayment or suffers insolvency. Such debts are known as doubtful debts, and are not counted for Zakah unless they are actually repaid. Once this debt is paid, Zakah is payable on it for one year only, no matter how many years it has been owed by the debtor.

Zakah on Industry: Industrial activities have more in common with commercial activities than other activities. Industry can in no way be separated from commerce. Rather, the industrial activity in general is based on buying raw material and selling them after manufacturing. Thus, all the rules of Zakah on commercial commodities are applicable to industrial activities. As for institutions that manufacture articles for the benefit of other clients, the tools utilized by such institutions are not considered as commercial commodities, e.g., entrepreneurship companies, iron and steel companies, goldsmiths and carpenters. However, in case such industrial companies buy raw materials and manufacture them with the aim of investing them in trade for their own benefit, such materials are to be considered as commercial commodities, which will be counted for Zakah after deducing the manufacturing expenditures.

Industrial activities are divided into two types: The First: This type includes buying already manufactured commodities with the aim of investing them in trade. The value of such commodities is estimated according to the market value. Then, through adding their value to the cash money and the external good debts, after deducing the debts owed by the payer, the amount of Zakah can be estimated. The Second: This type includes the commodities manufactured by the payer of Zakah. In this instance, Zakah is paid only on the raw material before manufacturing and the materials added while processing, that will be a major component of the article after manufacturing. In the case of raw materials that remained in possession for a full year, or added into the duration calculated for a similar Nisab, such as cash money or commercial commodities, Zakah will be estimated according to the first duration, without calculating a new duration of a full year. This can be represented in a raw cloth that remains in factory for six months then made clothes. The amount of Zakah liable on both types is a rate of 2.5%.

Zakah Payable by Commercial and Industrial Companies

1. Collecting Zakah from commercial and industrial corporations depends on dealing with them as individual entities, provided that: a) There is an issuance of a binding legal provision to pay Zakah.b) It should be stipulated in the company bylaws.c) A decision to this effect is taken by the corporation's general assembly.d) The approval of all shareholders (to authorize the administration of corporation to pay Zakah on their behalf). This trend relies on the principle of Khultah that is supported by the Sunnah as regards Zakah on cattle. Some juristic schools were in favor of extending the principle of Khultah to all kinds of Zakah. This view was adopted by the First Conference on Zakah. However, in case none of the four above-mentioned conditions is realized, the corporation should estimate the amount of Zakah payable on its properties, then provide a sheet on an annual basis containing the amount of Zakah due on each individual share for easy reference by the shareholders. 2. A corporation should calculate the Zakah due on its properties in the same way as an individual entity. The corporation should estimate the amount of Zakah payable on its properties according to their type: cattle, crops, commercial commodities ... etc.

Note: Zakah is not due on shares owned by the public treasury, charitable endowments, institutions administering Zakah or charitable associations.