Zakat is an obligatory charity in Islam. It is calculated as 2.5% of total qualifying wealth held for one lunar year, if it exceeds the Nisab threshold.
Formula:
Zakat = 2.5% × (Cash + Gold + Silver + Business Assets - Debts)
Example: If you have $10,000 cash, $5,000 in gold, $1,000 in silver, $4,000 in business assets, and $3,000 debts, then:
Total Assets = 10000 + 5000 + 1000 + 4000 - 3000 = 17000 Zakat Due = 17000 × 0.025 = 425
This is the amount of Zakat you should pay.
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