Scholars have established specific conditions or requirements for Zakat to be incumbent on the individual. Some of these conditions are related to the person that pays the Zakat and others to the property itself:
Zakah is only incumbent on Muslims. This is because it is one of the pillars of Islam. Allah says, “Take from their wealth a sadaqah in order to purify them and sanctify them with it, and invoke Allah for them. Verily! Your invocations are a source of security for them.” [9:103] This verse is addressing Muslims and not the disbelievers, for the latter are not entitled to purification and sanctification. Furthermore, Muslims are the ones in need of purification. This shows that zakah is not mandatory upon the disbelievers and it is not to be collected from them unless they embrace Islam. In the above hadeeth, the Prophet, sallallaahu alayhe wasallam, asked Mu’adh to tell those who believed and established salah of their obligation of zakah. This also shows that zakah is not incumbent on the non-Muslim. However, the non-Muslims will be questioned about it in the hereafter because they are commanded to follow the Shari’ah, it’s principle and branches.
TAKLEEF (Legal Competency for Obligation)
Some scholars have placed the conditions of buloogh (reaching the age of puberty) and sanity (intellectual and emotional stability) for the mandate of zakah. They said that, “zakah is not mandatory on the wealth of those who are not mukallaf (competent persons obligated to observe the precepts of religion).” This is so because zakah is an act of worship and acts of worship require intention. However, these people cannot have any intention considered confident or reliable. Other acts of worship such as salah, fasting and hajj are also not required from them.
The validity of zakah depends upon the expression of one’s intention. The one paying the zakah should pay it to its recipients, believing that it is an obligation to be incumbent on the individual. the zakah and others to the property itself: to be discharged. The Prophet, sallallaahu alayhi wasallam, said, “The value of one’s deeds is determined by one’s intentions.” Zakah is an act of worship. Therefore, it should be associated with intention.
COMPLETE POSSESSION OF WEALTH
The real owner of the wealth is Allah and Allah has, out of His Grace and Generosity, granted man succession to it. He has entrusted man with it so that man can use it and dispose of it according to the Law of the Real Owner. Allah says, “And give them something out of the wealth of Allah which He has bestowed upon you.” [24:3] He also says, “Believe in Allah and His Messenger, and spend of that whereof He has made you trustees.” [57:7]
The meaning of complete possession of wealth, in this instance, is that the wealth is within the hands of a particular person and that such wealth is free from any rights by others. This person has the right to dispose of and use the wealth as he wills. He must have the possibility of benefiting from his possession and must be personally designated. Two important concerns should be noted regarding this condition:
The money is designated to its owners. This meaning is indicated in many verses in the Qur’an among which are the following: “Take from their wealth a sadaqah …” [9:103] and “And those in whose wealth there is a known right for the needy who ask, and for those who are deprived (of wealth).” [70:24-25) This designation suggests possession. They may use and dispose of their wealth, as they will.
Zakah is to give possession of the wealth to its recipients. In order to do so, the person should possess the wealth. How can a person give away money to others that does not belong to him? There are also other circumstances and conditions under which, a person’s wealth or a portion thereof, is not liable for zakah.
WEALTH WITH NO OWNER
Such as the moneys of the state collected by zakah, taxation or other sources. There is no zakah on these moneys because they belong to the entire community, including the poor.
WAQF (endowments) of a public sector
Moneys from sources such as masajid, fighters in the path of Allah, orphans, schools, etc., are not subject to zakah according to sound opinions. Nor is the one-third or less portion from the will of the deceased.
Unlawful wealth may include wealth attained from theft, extortion, forgery, bribery, monopoly, riba, cheating, etc. One should return such moneys to their rightful owners or their inheritors. If one does not know who they are, then the moneys should all be given to the poor and not kept. If a person is insistent upon keeping possession of this type of wealth, and the wealth is still present after a complete year has passed, it then becomes liable to zakah.
When a debt is involved, who is responsible to pay the zakah on it, the lender or the debtor? Is the debt even subject to zakah? The majority of scholars have classified debts into two categories: the good debt and the bad debt.
A debt that is acknowledged by the debtor with a willingness to repay it is a good debt. The lender should pay the zakah on this type of debt after each bawl (one Islamic calendar year).
A bad debt is one where there is no hope of receiving repayment because the debtor is insolvent or he denies the debt and there is no proof of it. There are different opinions regarding this issue. Some scholars have said that when the tender receives payment he should pay zakah on all the previous years owed. Others maintain that when the lender receives repayment he pays zakah for one year only. Others hold that the lender doesn’t have to pay zakah on it at all.
Wealth should be such that it produces a profit or benefit to its owner. There are two types of growth in wealth: real growth and assumed growth.
Real growth is similar to the growth and increase of wealth in business or in multiplication, such as the multiplication of sheep and camels.
Assumed growth is similar to the capability of wealth to grow if it is used in business projects. Jurists have made conclusions on this condition from the following Hadith: “The mare and the slave of a Muslim are not subject to zakah.” (Muslim.) The Prophet, sallallaahu alayhi wasallam, clearly avoided zakah on wealth used to meet the genuine requirement of livelihood or for personal use. Based on this, jurists have stated that the reason for subjecting wealth to zakah is its actual growth. So there should be no zakah on wealth saved for basic requirements, such as food, clothes, housing and other basic needs.
CONDITION OF NISAAB
Zakah should be paid on any amount of growing wealth that reaches Nisaab.
PASSING OF HAWL
A hawl, or one complete Islamic calendar year, should pass with the wealth being in possession by its owner. This condition is related to livestock, money and commercial commodities.
Moneys have to exceed the amount needed by the giver. If the person is in need of the money that he has, to cover his basic needs, then he is not supposed to pay zakah. There is no point in charging the needy. Jurists have defined the basic needs accurately and realistically. They state that it is what may protect and provide man with bare necessities to make a life, such as housing, food, clothing, etc. It also implies the inclusion of a debt for the debtor needs to pay off his debt from what he possesses of the Nisaab; it also includes craft machinery, furniture, transportation or books, etc.