Ramadan-ul-Mubarak
07-30-2012, 06:45 PM
Allah (The Glorified and the Exalted- Subhaanahu wa Ta'ala) commands in the Quran, "Take alms out of their property, you would cleanse them and purify them thereby, and pray for them; surely your prayer is a relief to them; and Allah is Hearing, Knowing." [Al-Quran 9:103]
Narrated Ibn 'Umar: Allah's Apostle said: Islam is based on (the following) five (principles): To testify that none has the right to be worshipped but Allah and Muhammad is Allah's Apostle; to offer the (compulsory congregational) prayers dutifully and perfectly; to pay Zakat (i.e. alms); to perform Hajj. (i.e. Pilgrimage to Mecca), and to observe fast during the month of Ramadan. (Al-Bukhari, Vol.1, Book 2, No.7).
Allah has notified some things on whoihc the Zakat is require to pay if you will not then it will effect you in Judgemnt day and in the world to. So Followings are the list of Things on which zakat is Require
Gold and Silver
Cash
Stocks
Mutual Funds
Stock Options
Business Merchandise Inventory
Private Companies, Corporations and Partnerships
Retirement Plans (401K, IRA, etc.)
Real Estate Investments in Property Owning Companies
Accounts Receivable
Profits from Investments
Trusts
Long-Term Insurance (Life Insurance)
Lump Sum Payments in Terms of Compulsory Pension and Provident Funds
Severance Package
Income Tax
Liabilities which may be deducted
Buried Precious Metals or Minerals (Rikaz)
Livestock, Animals, Cows, Sheep, Camels
Agricultural Produce
Zakat On Retirement Plans (401K, IRA, etc.)
:
Fund withdrawals from such plans triggers early withdrawal penalty (in case the funds are withdrawn before one reaches the retirement age) and taxes. Hence, Zakat on 401K, IRA and other retirement plans will only be due when the funds are received. At that time the person must pay the Zakat of all the past years, and not just one year, i.e. ever since he became the owner of Nisab and ever since this money reached that limit. This will require a lot of effort in keeping track of each year's Zakat-able amount until the funds have been withdrawn. Hence, it is advised by the scholars to pay Zakat on the 401K, IRA plans, etc. plans yearly, to avoid miscalculations after several years of accumulation.
Narrated Ibn 'Umar: Allah's Apostle said: Islam is based on (the following) five (principles): To testify that none has the right to be worshipped but Allah and Muhammad is Allah's Apostle; to offer the (compulsory congregational) prayers dutifully and perfectly; to pay Zakat (i.e. alms); to perform Hajj. (i.e. Pilgrimage to Mecca), and to observe fast during the month of Ramadan. (Al-Bukhari, Vol.1, Book 2, No.7).
Allah has notified some things on whoihc the Zakat is require to pay if you will not then it will effect you in Judgemnt day and in the world to. So Followings are the list of Things on which zakat is Require
Gold and Silver
Cash
Stocks
Mutual Funds
Stock Options
Business Merchandise Inventory
Private Companies, Corporations and Partnerships
Retirement Plans (401K, IRA, etc.)
Real Estate Investments in Property Owning Companies
Accounts Receivable
Profits from Investments
Trusts
Long-Term Insurance (Life Insurance)
Lump Sum Payments in Terms of Compulsory Pension and Provident Funds
Severance Package
Income Tax
Liabilities which may be deducted
Buried Precious Metals or Minerals (Rikaz)
Livestock, Animals, Cows, Sheep, Camels
Agricultural Produce
Zakat On Retirement Plans (401K, IRA, etc.)
:
Fund withdrawals from such plans triggers early withdrawal penalty (in case the funds are withdrawn before one reaches the retirement age) and taxes. Hence, Zakat on 401K, IRA and other retirement plans will only be due when the funds are received. At that time the person must pay the Zakat of all the past years, and not just one year, i.e. ever since he became the owner of Nisab and ever since this money reached that limit. This will require a lot of effort in keeping track of each year's Zakat-able amount until the funds have been withdrawn. Hence, it is advised by the scholars to pay Zakat on the 401K, IRA plans, etc. plans yearly, to avoid miscalculations after several years of accumulation.