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The Basics of Money in Islam (The Paying of Zakat and the Avoidance of Interest)

Learn two basic canons of Muslim money. Zakat is a tax levied upon all earning and able Muslims whereas interest is an income element that Muslims must avoid. Paying zakat (Islamic tax) is one of the tenets of Islam and thus, obligatory to all Muslims (al-Baqarah: 277). There are several reasons for paying zakat. One of the seven categories of zakat recipients are reverts to Islam (at-Tawbah), sealing camaraderie between born Muslims and new brothers and sisters of the faith. This is similar to the bonds created between the Ansar and the Muhajireen during the emigration from Makkah to Madinah.

Money is also purified by the zakat deduction. Collectively, a community who diligently pays zakat works together to eradicate poverty in society. This emphasises the importance of having women contribute to an economy.

How much is zakat? According to prominent financial scholar, Monzer Kahf, 2.5% of a Muslim’s disposable income belongs to the zakat recipients. Besides income, zakat also applies to savings, property and gold.

Make money more Islamic! Islam has always advocated the rights of women – especially the exclusive right to income. However, it is inappropriate to abuse that right by ignoring Allah (SWT) commandments regarding money.

Paying zakat not only reminds Muslims of their ability to earn an income and curbs indulgences in aesthetics and material whims. By avoiding interest, Muslims avoid transacting with service providers that are fed by passive income.

Making halal money, why are Muslims making harm money.

This article Why Are Muslims Earning Haram Consumption? illustrates some ways to earn halal money but also pointed out why some people are making haram money even though those people, out of desperation need money, halal or otherwise.

The importance of money in Islam

Prophets Dawud and Sulaiman (A.S.) were rulers at their time. They were very rich and yet they were prophets. There were also some very rich Ashb-e-Rasool (S.A.W.), the richest of whom was Hazrat Abdur Rahman bin Auf, who was what would be termed a billionaire today. Yet, he was so religious that Prophet Mohammad (S.A.W.) was informed by angel Jibrael that Hazrat Abdur Rahman is a ‘jannati’. This shows that money is not something that is discouraged in Islam. In fact, a person can acquire a lot of good deeds and a place in heaven just on the basis of money. How about going for hajj, umrah, doing sadaqah, helping someone during a financial crisis, building a mosque, spending luxuriously on one’s family and a list of other things that are beneficial for spirituality.

Muslims with long beards, regardless of how religious they are, beg rich Muslims for money. When their family member is in the hospital to when they want to get their daughters married. Keep in mind that begging does not have to be with a bowl on the street. Begging is a heinous sin in Islam and is very detrimental for spirituality. Yet, even religious Muslims beg. Allah SWT has said that He opens the door of need for people who beg. The sin of begging arises due to not having enough money.

People who don’t have enough money take loans to buy a house, car, get their children into university etc. Then they commit the sin of paying interest on the loan. This sin is also a result of not having enough money