What is the Nisab of Zakat in Islam?

Nisab is the minimum wealth a Muslim must possess before Zakat becomes obligatory. 

Once they have this amount, they must donate some of their wealth to help those in need. 

The Prophet Muhammad (Peace Be Upon Him) established the Nisab of Zakat, a certain weight of gold or silver. 

• Gold Zakat Nisab: 3 ounces (87.48 grams)
• Silver Zakat Nisab: 21 ounces (612.36 grams)

Zakat is calculated at 2.5% of total wealth, provided it meets or exceeds the Nisab threshold. The Nisab value varies depending on the type of assets, such as cash, trade goods, or agricultural produce.

Here’s an important principle to remember:

• If you possess only gold, use the Nisab of gold to determine your Zakat obligation.
• If you have a mix of assets like gold, silver, and cash, use the silver nisab, which is lower. This will ensure that more people benefit from Zakat.

Let’s further explore the current nisab of zakat, its importance, when it is due, and its calculations.

Meaning of Nisab

The word 'nisab' means 'origin' because it marks the starting point at which a person's wealth becomes eligible for Zakat, benefiting the poor and those in need. 

Zakat Nisab as of January 2025

Here are the current Zakat Nisab thresholds based on the values of silver and gold:

• Using the value of silver (612.36 grams = 52.5) – approximately PKR 154,087 
• Using the value of gold (87.48 grams = 7.5 Tola) – approximately PKR 2090527.2 

Note: In the Hanafi school, silver's worth sets the Zakat threshold; other schools of thought use gold for this purpose.

Zakat Nisab 2025 in Pakistan: For the year 1445-46 AH (2025), the Zakat Nisab in Pakistan is set at Rs. 179,689. Any account holding this amount or more on the first day of Ramadan will be subject to a Zakat deduction. 

Nisab and Zakat Rate for Different Types of Assets

The nisab value for personal wealth, business assets, and discovered treasures is equivalent to the current market value of 87.48 grams of pure gold (approximately 3 U.S. ounces).

For livestock:

• The nisab for ovine (sheep and goats) is 40 animals.
• The nisab for bovine (cattle, buffalo, bison, antelope, yaks, etc.) is 30 animals.
• For camels, the nisab is set at 5 animals.

For Personal Wealth:

• Nisab = 3 U.S. oz. of pure gold

• Zakat Rate = 2.5%

For Business Wealth:

• Nisab = 3 U.S. oz. of pure gold

• Zakat Rate = 2.5%

For Trade Goods:

• Nisab = 3 U.S. oz. of pure gold

• Zakat Rate = 2.5%

For Exploited Assets:

• Nisab = 3 U.S. oz. of pure gold

• Zakat Rate = 2.5%

Note: The value of 3 U.S. oz. of pure gold is approximately 2,245,688.07 PKR according to the current market rate of 1 XAU = 748,563 PKR.

For Agricultural Produce:

• Irrigated Crops:
• Nisab = Current Wholesale Value
• Zakat Rate = 5%
• Non-Irrigated Crops:
• Nisab = Current Wholesale Value
• Zakat Rate = 10%

For Treasure Troves, Hidden Windfalls, Natural Resources:

• Nisab = 3 U.S. oz. of pure gold

• Zakat Rate = 20%

Note: The actual monetary equivalent of the nisab will vary depending on the current market rate of gold or wholesale values of agricultural produce.

When Zakat Nisab Due?

Zakat becomes obligatory on assets such as gold, cash, and property when they exceed the Nisab threshold within the Hijri year, a lunar calendar cycle. This year-long timeframe for calculating Zakat is termed a hawl.

Note: The hawl period begins when your wealth reaches the minimum threshold and continues for 12 full lunar months.

Changes in Nisab When Zakat Comes Due

Here are the perspectives about changing in nisab of Zakat from two major schools of thought:

1. Maliki, Shafi‘i, and Hanbali Schools: If wealth falls below the Nisab threshold within the lunar year, the Zakat year restarts.
2. Hanafi School: If wealth drops below the Nisab after initially reaching it, the Zakat schedule doesn't change, as long as the wealth meets the Nisab at the beginning of the Zakat year (hawl) and on the due date.

The above graph depicts the Hanafi view on Nisab (dates are arbitrary). Periodic dips below Nisab don't impact Zakat payment at its due date (“W” In this graph). “A” marks when other legal schools restart the Zakat year because wealth dropped below, then rose back to, the Nisab threshold.

Nisab and Zakat Calculation for Personal and Business Wealth

The Nisab for different types of Zakatable wealth is determined in monetary terms. It encompasses both personal and business wealth.

When individual wealth (P WEALTH) and business wealth (B WEALTH) each reach the nisab threshold separately, Zakat is paid. It's calculated at a rate of 2.5% on their combined total. 

If the subtotals for P WEALTH and B WEALTH are individually below the nisab threshold but together meet or exceed it, the amounts are added. Zakat is then paid on the total at 2.5%.

If you have outstanding debts to repay or have already paid Zakat in advance. Then, these amounts will be subtracted from your total Zakat due, and you have to pay the remaining balance.

Importance of Zakat Nisab in Islam

Zakat shows devotion to Allah (SWT) and comes with rules. The main one is figuring out if you owe it by meeting the Nisab of Zakat. Islam's principles of ease and peace ensure that burdens do not exceed one's capacity, as exemplified by Zakat requirements.

For those not obligated to pay Zakat, offering Sadaqah in various forms remains an option, all of which are rewarded by Allah (SWT). This extends beyond monetary charity to encompass gestures such as smiling at others, aiding those in need, and offering prayers for others.

In conclusion, understanding the meaning of Zakat nisab and the current zakat rate is crucial for Muslims to fulfill their Zakat obligations effectively. Zakat nisab on different assets ensures that your wealth is calculated accurately and that you pay the right amount of Zakat. 

Timing is key, as Zakat is due once your wealth reaches the nisab threshold, and it must be calculated annually. By calculating Zakat on personal and business wealth under the Nisab, individuals uphold the principles of charity and social responsibility. 

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