Zakat is the third pillar of Islam. It signifies the amount of wealth a Muslim pays to the poor and underprivileged people. Zakat is a compulsory act of worship and signifies the responsibility and duty the richer have towards those in need. Literal meaning of the word Zakat is ‘to cleanse.’ Muslims believe that paying Zakat purifies their wealth and pleases Allah SWT.

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Nisab is a term that denotes the minimum amount of wealth Muslims must have before Zakat becomes obligatory upon them. They are required to donate 2.5% of their total wealth to those in need.

Nisab was set by Prophet Muhammad (PBUH) at 20 Mithqaal of gold or 200 dirhams of silver. This is the equivalent of 87.48 grams (7.5 tola) of gold and 612.36 grams (52.5 tola) of silver respectively.

This is to be noted carefully that if someone possesses only gold, then the Nisab level for gold (87.48 grams) must be used. However if a mixture of assets are possessed (like 1 or 2 tola gold, 10 tola silver, 5 thousand rupees etc.) then the (lower) silver Nisab level (current value of 612.36 gram silver) must be used.

Zakat brings one closer to Allah SWT. As an obligatory act of charity, it ensures that the poor and needy are protected from deprivation, hunger and financial insecurity. Zakat not only benefits those in need but also brings countless blessings to the ones who pay it. It cleanses our wealth, wipes away minor sins and purifies heart and soul from stinginess.

“…but My mercy encompasses all things. I shall ordain My mercy for those who are conscious of God and pay the prescribed alms; who believe in Our Revelations.”

“My mercy encompasses all things, but I will specify it for the righteous who give Zakat” – (Quran 7:156)

“Alms (here it means Zakat) are meant only for the poor, the needy, those who administer them, those whose hearts need winning over, to free slaves and help those in debt, for God’s cause, and for travelers in need. This is ordained by God; God is all knowing and wise.” (Quran 9:60)

Here are the eight categories of recipients of Zakat:

1. The poor (Fuqara)
2. The needy (Masakeen)
3. Collectors of Zakah (Al-‘Aamileen)
4. Friends of the Islamic community and/or revert Muslims (Al-Mu’allafatu-Al- Quloob)
5. The cause of (freeing) the slaves (Ar-Riqaab)
6. Debtors (Gharimeen)
7. The way of Allah SWT (fi Sabilillah)
8. Wayfarer (Ibn-us-sabil)

Zakat must be paid by the one who is:

• Muslim
• Major (Baligh)
• Sane
• Sahib-un-nisaab (owner of wealth above the level of nisab)

If all of the above apply, you have to pay 2.5% Zakat on all of your savings and other applicable assets.

It is not obligatory to pay Zakat on every asset. Only those assets that have the potential of growth or increase are subject to Zakat. These assets may be broadly classified as follows:

1. Trading Assets
2. Cash & Cash Equivalent (like prizebonds, travelers checks etc.)
3. Gold and Silver (for any purpose)
4. Livestock like goats, sheep, cows and camels (Nisab for this is different)
5. Agricultural output (It is called Ushr)

Only the balanced value of these assets at the end of the lunar year is subjected to Zakat. No Zakat is obligatory on the amount spent over the whole year.

Zakat only becomes obligatory once a full lunar year has passed, providing that your qualifying wealth has been held for one full year. Your Zakat year therefore starts on the date your wealth first equaled or exceeded the Nisab and should be calculated on that date for each subsequent year.

Although you can give Zakat at any time of year many Muslims choose to pay their Zakat during the Holy month of Ramadan. This is because the rewards and blessings of giving in this month are far greater than at any other time of the year.

TCF’s Zakat collection process is certified to be compliant with Islamic law. Our Zakat collection and disbursement procedures and structures have been reviewed thoroughly by our Religious Advisor, who has issued a certificate confirming that we are Compliant with the Islamic law. We aim to provide Muslims over the world a simple, transparent and ethical way to invest in educating the underprivileged children of Pakistan.

Please see Compliance Certificate here

TCF follows the ‘wakala’ model of Zakat. As per this model Muslim parents of deserving students, upon their children’s admission in TCF Schools, nominate TCF as a ‘wakil’ (agent) and authorize the organization to receive Zakat on their behalf. This Zakat money is then spent on providing education to children during the year. We ensure that any parents consenting for the utilization of Zakat for their children fulfill Islamic requirements and qualify as recipients of Zakat.

All proceeds collected by TCF as Zakat are maintained in separate bank accounts at Islamic Banks in Pakistan. The funds are then utilized through the course of the year to educate deserving children. We have well defined SOPs governing our Zakat utilization. These SOPs have clearly been delineated by our Religious Advisory team.

Currently, 40% of our operational expenses are met through the Zakat allocations, while the rest of the requirements are fulfilled through the general pool of funds. The percentage of funds going towards Zakat is carefully allocated based on the number of consent forms received by consenting and qualifying parents. Every quarter, a thorough review of Zakat expenses is carried out to ensure that Zakat is being apportioned correctly.

Alhamd Shariah Advisory Services Private Limited is our Islamic law Advisor. ASAS is a Private Limited Company registered with the Securities and Exchange Commission of Pakistan (SECP) under the Companies Act and Shariah Advisor Regulation 2017.

Mufti Muhammad Ibrahim Essa (CEO-ASAS)
Mufti Ibrahim Essa, the Chief Executive Officer of ASAS, is a well-known recognized Islamic law Scholar in the field of Islamic Finance, Banking, and Takaful. He has completed his Darse Nizami (Masters in Quran and Sunnah) and Takhassus fil Ifta (Specialization in Islamic Jurisprudence) from Jamiah Darul Uloom Karachi. Currently, he is working as teacher and Member of Darul Ifta Jamiah Darul Uloom Karachi. Mufti Ibrahim Essa is associated as Chairman and member of various banks/financial institutions. He is also the Religious Advisor of various banks and insurance companies; both locally and internationally. Mufti Ibrahim has also written more than four thousand Fatawas on different topics.

Mufti Ubaid ur Rahman Zubairi (Director-ASAS)
Mufti Ubaid ur Rahman Zubairi is recognized Islamic law Advisor registered with S.E.C.P. He has completed his graduation as a Islamic law Scholar (Shahadat-ul-Almiyah) from the world renowned Islamic university “Jamia Darul Uloom Karachi” under the great supervision of Sheikh Mufti Rafi Usmani and Sheikh Mufti Muhamamd Taqi Usmani. He holds specialization in Islamic Jurisprudence and Fatawa from Jamia Ashraful Madaris Karachi. He has written and issued several hundred expert legal opinions (Fatawa) on general Islamic Science. Zubairi has an experience of being a faculty & Darul-Ifta member of same Jamia since 2015. He is also the Religious Advisor of a Takaful company, various manufacturing and trading companies, NGOs, foundations and different trusts.

Many people mistakenly believe that Zakat can only be given directly to individuals or families and not to organisations. This is simply not true. Zakat can be given to anyone who is ‘mustahiq’ or qualifies for receiving Zakat, either directly or through an organisation or intermediary, provided the money is spent according to the rules stipulated by Islam. When it comes to formal education of the children of deserving parents, it is a noble act, as seeking and obtaining education is a beneficial pursuit for both self and society and Islam places great emphasis upon it.