Transcript the zakat
EIMAN AL-SHANQAITI 20081571 Chapter 6: Islam and Private Wealth Management Outline.. Wealth and Islam The Islamic Perspective on Wealth Creation Management, and Distribution Cycle of wealth.. Wealth creation Wealth enhancement Wealth protection Wealth cleansing and distribution Zakat Types of zakat Faraid Will The differences between Muslim and non-Muslim will Prospects for Islamic Wealth Management Wealth and Islam wealth can be obtained through.. effort inheritance all wealth (maal) belongs to Allah and mankind is only a trustee of this wealth. wasting wealth is scorned. Money should be earned, invested, and spent in approved (halal) ways. The zakat tax system is one of the five pillars of Islam.. It is effectively redistributes wealth from the “haves” to the “have-nots,” Islamic Inheritance law.. ensure that wealth is evenly shared among the ummah. The Islamic Perspective on Wealth Creation Management, and Distribution wealth serves many purposes and should not be spent on unlawful products and services. the need to attain wealth provides the motivation to work hard. the need to manage wealth provides the discipline to save in order to support family and society By saving even a small portion of income or profits a Muslim can help fight consumerism and inflation. Wealth creation wealth can be obtained through effort (business or work) or through inheritance. Allah is the absolute owner of wealth and mankind is the trustee of wealth. Wealth should be earned and multiplied in an Islamically permissible way, which means it must not be generated from prohibited business activities. wealth enhancement Enhancement of wealth in Islam is achieved through.. investing only in Shari’a-complaint financial products that is, products entirely free from riba, gharar ,and maisir. For example: investing in financial products such as.. stocks, investment funds bonds (sukuk), insurance (takaful) plans, wadiah and mudharabah savings plans.. Etc. The goal of IWM, which is similar to the goal of conventional wealth management is to garner reasonable capital growth while preserving accumulated wealth. Wealth protection The protection of wealth is important according to Islam. every possible financial risk and threat must be considered and provided for. Wealth protection play an important role in the practice of IWM.. risk management. Islamic insurance (takaful). What is risk management? Risk management ensures that an organization identifies the risks. also guarantees that the organization creates an effective plan to prevent losses or reduce the impact if a loss occurs. Risk management process Takaful is the Islamic insurance system The main parties : The Operator The Participants Takaful has no contact with ghrar. The takaful fund provide the necessary money to cover the sum of damages that may happen to participant. (the main purpose of takaful) Takaful is a profit-loss sharing . investing in Shari’a-compliant financial products that are being structured to avoid gharar is consistent with the Islamic protection of wealth Wealth Cleansing and Distribution Islam requires both physical and spiritual cleanliness. Cleanliness of the spirit involves cleanliness of the mind.. so that it is free of bad intent or desire to commit unlawful act. cleanliness of the heart.. so that is free of jealousy, hypocrisy, and evil desires. Spiritual cleanliness is associated with hope, truthfulness, forgiveness, and compassion. Cleansing Creation of wealth Distribution of wealth Cleansing (physically and spiritually) Protection of wealth Enhancement of wealth To achieve spiritual cleanliness and wealth purification, Islam espouses the zakat tax system. Zakat Zakat is a means of narrowing the gap between rich and poor and a way to help meet the needs of less fortunate members of society. zakat Paying zakat is considered to be a form of worshipping Allah. Paying zakat is an obligation for Muslims to fulfill. and It is the third of the five pillars of Islam. types of zakat Zakat fitr is due from the start of Ramadan until the prayer ending Ramadan (eid al-fitr). Zakat on maal: This type of zakat is payable on traditional types of wealth, such as agricultural produce, reared animals, a business, gold, and silver. The wealth is a gift from Allah, everyone has the duty to use part of it to help the needy . This redistribution of wealth is a way to reduce social inequality faraid Islamic inheritance law Faraid is the inheritance law of islam and its based on the al-Quran, al-Sunnah, the consensus of the Prophet's (peace be upon him) companions and their ijtihad. faraid Islamic law is explained in detail in sourat Al-Nisa regard to the beneficiaries and their portions in the inheritance.. The principle of inheritance distribution in Islam is that the portion for a male beneficiary is equivalent to two parts of the female beneficiary. faraid “Allah instructs you concerning your children: for the male, what is equal to the share of two females. But if there are [only] daughters, two or more, for them is two thirds of one's estate. And if there is only one, for her is half. And for one's parents, to each one of them is a sixth of his estate if he left children. But if he had no children and the parents [alone] inherit from him, then for his mother is one third. And if he had male siblings [or Female siblings], for his mother is a sixth, after any bequest he [may have] made or debt. Your parents or your children - you know not which of them are nearest to you in benefit. [These shares are] an obligation [imposed] by Allah. Indeed, Allah is ever Knowing and Wise” (al-Quran, surah al-Nisa‟ 4: 11) faraid "And for you is half of what your wives leave if they have no child. But if they have a child, for you is one fourth of what they leave, after any bequest they [may have] made or debt. And for the wives is one fourth if you leave no child. But if you leave a child, then for them is an eighth of what you leave, after any bequest you [may have] made or debt. And if a man or woman leaves neither ascendants nor descendants but has a brother or a female sibling, then for each one of them is a sixth. But if they are more than two, they share a third, after any bequest which was made or debt, as long as there is no detriment [caused]. [This is] an ordinance from Allah, and Allah is Knowing and Forbearing” (al-Quran, surah al-Nisa‟4: 12). An example.. faraid “They request from you a [legal] ruling. Say, "Allah gives you a ruling concerning one having neither descendants nor ascendants [as beneficiaries]." If a man dies, leaving no child but [only] a female sibling, she will have half of what he left. And he inherits from her if she [dies and] has no child. But if there are two Female siblings [or more], they will have two-thirds of what he left. If there are both male siblings and Female siblings, the male will have the share of two females. Allah makes clear to you [His law], lest you go astray. And Allah is Knowing of all things” (al-Quran, surah al-Nisa‟ 4: 176). The distribution of inheritance among the beneficiaries must be made after all debts being made either debts to Allah such as zakat, kaffarah or debts to fellow human beings and after the deceased's will is settled on a 1/3 rate or less from the total inheritance amount. the Islamic law of inheritance automatically includes.. The spouse The parents The children Does not automatically include.. Grandchildren adopted children illegitimate children Foster parents non Muslim parents non-Muslim children non-Muslim family members will A Muslim may dispose of one third of his estate as he wishes through the will. A will may be either oral or written. You can distribute only one third of the wealth to who you mention in the will. the will must be declared in the presence of two witnesses in order to be valid. (an exception exists, according to the Islamic schools) a will is still acceptable if it is written in the known Hand writing of the testator or bears his known signature. The differences between Muslim and non-Muslim wills are enumerated in Prospects for Islamic Wealth Management HNW indivisuals becoming more interested in islamic wealth management. The demand for islamic financial services is increasing. Challenges the shortage of skills. the numbers of sufficient credential religious scholars that can issue new products are limited. the numbers of bankers, lawyers and technical staff who are needed to develop new products are limited. In conclusion Islam does encourage the accumulation of wealth but it must come from halal sources and the money must not be spend on things which are against the teaching of islam. Muslims have to pay zakah. And in case of death the inheritance should be distributed as in teaching of islam THE END Thank you Any Questions? REFERENCES shamugam, B., & zahari, Z. R. (2009). A primer on islamic finance. CFA Institute. Retrieved from http://www.cfapubs.org/toc/rf/2009/2009/6 bekkin, I. R. (n.d.). what is takaful?(islamic insurance). Retrieved from http://www.takafol.ru/eng/rubrika.php?rub=5 Awang, M. R. (n.d.). The islamic inheritance law (faraid). Retrieved from http://www.islam.gov.my/sites/default/files/islamic_inheritence_law_farai d.pdf Faraid or muslim inheritance law. (n.d.). Retrieved from http://www.muslimpersonallaw.co.za/inheritancedocs/Law Awareness Faraid or Muslim Inheritance Law.pdf