A:1) Zakaat is payable on cash, gold, silver, merchandise, and livestock.
2) The above five types of wealth must be equal to, or more than the nisaab of Zakaat. The nisaab is the minimum amount of money on which zakaat is payable; this amount fluctuates marginally every month depending on the market price of silver.
3) If at the start of the Islamic year you have cash equal to the above nisaab or more, and when the Islamic year ends you still have cash equal to this nisaab, or more, then zakaat is payable.
4) If during the course of the year your savings decreased or increased, it does not matter and won’t affect the zakaat. You must only calculate zakaat on the cash you have at the end of the Islamic year.
5) One Islamic year must pass before zakaat becomes compulsory. You don’t need to pay zakaat before that.
6) Before paying zakaat you must deduct whatever debts you owe to people. This means all debts that are due in the month which you are paying your zakaat. This will be the month after your Islamic year has ended. These debts include, light account, rates account, taxes, telephone/cellphone bill, clothing accounts, etc.
7) Once you have deducted your debts from your savings, calculate two and a half percent of the balance. The result will be the money you need to pay out in zakaat
8) To delay the payment without a valid reason is sinful. It is not advisable to delay the fulfilment of Zakaat once it is due. (Al Hindiyyah V1 P170).
Mufti Siraj Desai