Is Zakah Due on Savings, and How Is It Calculated?
Yes. Zakah is 2.5% of savings held for one lunar year that meet or exceed the nisab, which is the value of 85 grams of gold or 595 grams of silver.
Where there is a genuine difference of opinion, it is named as such rather than smoothed over.
The evidence
The hawl is a full lunar year: the wealth must remain at or above nisab from the start of the year to its end, with fluctuations in between generally disregarded.
Most contemporary scholars recommend the silver nisab as it is lower, benefiting recipients — though the gold nisab is also used.
Debts you owe are generally deducted; scholars differ on long-term debts such as mortgages, with many deducting only the amount due within the year.
In practice
- Fix a lunar date each year as your zakah date and calculate on that day.
- Include cash, bank balances, gold, silver, business inventory and receivables you expect to recover.
- The eight categories of recipients are listed in Surah at-Tawbah 9:60.
Knowledge that is not acted on has a name in the tradition, and it is not a flattering one. Pick the smallest applicable step.
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Can Zakah Be Given to Family Members?
It can be given to eligible relatives who are not your direct dependants — siblings, aunts, uncles, cousins. It cannot be given to those you are obliged to maintain: parents, grandparents, children and grandchildren.
Can I Take Out Insurance?
Conventional commercial insurance is held impermissible by most contemporary fiqh councils due to gharar and riba. Takaful (cooperative insurance) is the permitted alternative, and legally mandated insurance is treated as a necessity.
What Are the Conditions for a Valid Business Partnership?
Clearly defined capital, a profit share stated as a proportion rather than a fixed amount, loss borne in proportion to capital, and a lawful underlying business.
Is a Mortgage Permissible if There Is No Islamic Alternative?
Conventional interest-based mortgages are prohibited by the clear texts on riba. A minority of contemporary scholars permitted them under strict necessity where no alternative exists; the majority did not, and the availability of Islamic finance has narrowed that argument considerably.