"True piety is this: to believe in God, and the Last Day, the Angels, the Book, and the Prophets, to give of one’s substance, however cherished, to kinsmen, and orphans, the needy, the travellers, beggars, and to ransom the slave, to perform the prayer, to pay the zakat.” (Qur’an 2:177)
A favourite tale in the Muslim world tells of a Persian Shah who came upon an old man planting an olive tree. Throughout the land, it was known that the olive tree takes decades to produce good fruit. When the Shah is asked why he is planting a tree whose benefit he will never reap, the old man replies, “Those who came before me planted, and we benefited. I am planting so that those who come after me shall benefit.”
According to the Qur’an, Zakat is next after prayer in importance and is one of the Five Pillars of Islam. The process involves giving 2.5% of total savings in a lunar year towards charity; these savings often take the form of gold and gold jewellery.
As far as the statutory Zakat system, established by the Prophet Muhammad’s successor is concerned, gold is considered an investment for the future, and as such need to be taken into consideration when working out the annual Zakat. However, according to UK-based Islamic charity NGO, Muslim Aid, gold jewellery for personal use lies in a grey area. They contend that whether your gold jewellery is Zakat-able depends on which school of thought you follow; most schools in Islam regulate that all gold jewellery is exempt from Zakat, but if you follow the Hanafi Madhhab, gold jewellery would be considered an investment and Zakat would have to be paid.
Oliver Goldsmith, the Irish poet, once said: "Where wealth accumulates, men decay." Literally, Zakat translates into “that which purifies.” Gold and other gifts that are donated not only purify one’s wealth, but are also treated as a spiritual purification in Islam, which serves as a means to draw closer to Allah. Therefore, besides being a moral obligation, Zakat can also be considered a spiritual one, which segregates one’s soul from desire and acts as a reminder that what we earn and have is not really ours, but rather a gift from God.
Refers to the commission paid by the investor during the time of exiting the mutual fund or Gold Exchange Traded Fund (ETF). The main purpose behind imposing the charge is to discourage investors from withdrawing from the mutual fund prematurely.
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