Your Zakat is a sacred Amaanah.

1. Purpose of this policy

This policy explains how Kashmir Welfare Foundation (“KWF”, “we”, “us” or “our”) approaches the calculation, collection, safeguarding and distribution of Zakat al-Mal and, where offered, Zakat al-Fitr.

It is intended to give donors confidence that Zakat is treated differently from general charitable income and is distributed only through approved Zakat arrangements.

This policy provides general guidance. It is not a personal fatwa and does not replace advice from a suitably qualified scholar who understands your circumstances.

2. What is Zakat?

Zakat is an obligatory act of worship and one of the five pillars of Islam. It purifies wealth and supports people who fall within the categories identified in the Qur’an.

Zakat al-Mal is generally due on qualifying net wealth at the end of a person’s Zakat year, provided the conditions of obligation are met. It is distinct from voluntary Sadaqah, general charity, Waqf and Zakat al-Fitr.

3. Our 100% Zakat promise

Business supporters, voluntary contributions, Gift Aid where lawfully available and other non-Zakat income may help KWF meet the costs of collecting and delivering Zakat.

Our promise relates to the Zakat received by KWF. A payment provider may deduct an external transaction charge before funds reach us. KWF will seek to reduce or cover such costs from non-Zakat funds where reasonably possible and will explain our treatment transparently.

4. Scholarly methodology

KWF’s general calculation guidance follows a Hanafi-oriented approach, reflecting the methodology commonly followed by many of our donors and communities.

Recognised schools of Islamic jurisprudence differ on some matters, including the use of gold or silver for nisab, personal jewellery, certain debts, pensions, investments and some recipient categories.

Where there is a recognised difference of opinion, KWF will explain the adopted position and encourage donors to follow the advice of a qualified scholar they trust.

5. Who is required to pay Zakat?

Under the general Hanafi-oriented guidance used by KWF, Zakat al-Mal is due from an adult, sane Muslim who owns qualifying net Zakatable wealth at or above the nisab and meets the relevant conditions.

Questions concerning children, a person lacking mental capacity, jointly held property, trusts, estates, business structures or disputed ownership should be referred to a qualified scholar.

6. The nisab threshold

Nisab is the minimum level of qualifying wealth at which Zakat becomes obligatory.

KWF’s calculator may show the current monetary equivalent of:

• approximately 87.48 grams of gold; and
• approximately 612.36 grams of silver.

The Hanafi approach generally uses the silver nisab when assessing mixed cash and financial wealth. Because gold and silver prices change, the sterling value must be updated regularly and should not be hard-coded permanently into this policy.

Donors who follow another recognised opinion may use the gold nisab or seek scholarly advice.

7. Your Zakat anniversary

A Zakat year is based on the lunar calendar. A person’s Zakat anniversary generally begins when their qualifying wealth first reaches the nisab.

On each annual Zakat date, the person calculates the Zakatable wealth they own at that time, deducts qualifying immediate liabilities and pays the amount due.

Donors should use a consistent date each lunar year. Ramadan is a popular time to pay, but Zakat becomes due on the individual’s actual Zakat anniversary unless advance payment or another valid approach is followed.

8. Rate of Zakat

For cash, gold, silver, trade goods and many financial assets, the commonly applied rate is 2.5%, equivalent to one fortieth of qualifying net wealth, after one lunar year.

Different rules and rates can apply to agricultural produce, livestock, minerals and other asset classes. KWF’s standard online calculator is not intended to determine all specialist forms of Zakat.

9. Zakatable assets

Depending on ownership and circumstances, Zakatable wealth may include:

Ownership, access, intention and asset type can change the ruling. Complex investments, pensions, businesses and property should be reviewed carefully.

10. Assets normally exempt from Zakat

Personal-use items are generally not Zakatable merely because they are valuable. Examples commonly include:

• the home in which you live;
• ordinary household furniture and possessions;
• a personal vehicle used for normal needs;
• clothing and work equipment used personally;
• non-gold and non-silver personal jewellery, subject to its nature;
• property not held for trade, although rental income or saved rent may be Zakatable.

If an item is acquired for resale, trading or investment, a different ruling may apply.

11. Deductible liabilities

Certain debts and amounts that are presently due may be deducted when calculating net Zakatable wealth. These may include:

• immediate personal debts and bills already due;
• overdue tax liabilities or tax that has become payable;
• the currently due portion of a longer-term obligation;
• short-term business liabilities connected to Zakatable assets.

Future living costs and the whole balance of a long-term mortgage or finance agreement are not automatically deductible. Scholarly approaches vary, so KWF’s calculator should clearly state the liability method it uses.

12. How to calculate Zakat

KWF may provide a calculator to assist donors, but responsibility for determining the correct amount remains with the person paying Zakat.

13. Monthly and advance Zakat payments

Under the Hanafi school, Zakat may generally be paid in advance once a person owns at least the nisab.

A donor may estimate the annual amount and pay it in monthly instalments. On the actual Zakat anniversary, the donor should complete a final calculation:

• if too little was paid, the shortfall should be paid promptly;
• if more was paid, the excess may be treated according to the donor’s intention and appropriate scholarly guidance.

A recurring Zakat schedule is a payment facility, not a guarantee that the estimated amount will exactly match the final obligation.

14. Missed or underpaid Zakat

Zakat that became due in a previous year does not cease merely because it was forgotten or miscalculated. A person should calculate and pay missed Zakat as accurately as reasonably possible.

Historical records, account statements, gold values, business records and the nisab applicable during the relevant period may be needed. Where exact figures are unavailable, the donor should make a careful good-faith estimate and seek scholarly advice.

15. Zakat al-Fitr (Fitrana)

Zakat al-Fitr is separate from Zakat al-Mal. It is due at the end of Ramadan and should reach eligible people before the Eid prayer.

It is paid for each qualifying household member according to the applicable scholarly rules. The amount is based on a prescribed quantity of staple food or its accepted cash equivalent.

KWF will publish the amount it is collecting for the relevant Ramadan and set a practical payment deadline that allows distribution before Eid. Donations received after the operational deadline may be handled in accordance with scholarly advice and the wording shown at the time of payment.

16. Who may receive Zakat?

Surah al-Tawbah 9:60 identifies eight categories of recipients:

KWF does not assume that every person affected by hardship is automatically Zakat-eligible. Eligibility is assessed before Zakat is allocated.

17. Beneficiary assessment

KWF applies proportionate checks to establish that a proposed recipient falls within an approved Zakat category.

Assessment may include:

• identity and household information;
• income, essential expenditure, assets and debts;
• dependants, disability, widowhood, orphanhood or other vulnerability;
• local verification and witness statements;
• evidence of medical, housing, education or emergency need;
• checking for duplicate or overlapping assistance;
• confirmation that the recipient can lawfully and validly take ownership.

Checks must be dignified and no more intrusive than reasonably necessary. Safeguarding and personal data must be protected.

18. Distribution, ownership and agency

Under KWF’s adopted approach, Zakat must be transferred in a way that gives an eligible recipient valid ownership or benefit in accordance with the approved scholarly rules.

KWF may act as the donor’s agent to identify recipients and deliver Zakat. Local field officers or trusted delivery partners may act on KWF’s behalf under documented controls.

Where Zakat is used to provide goods, medical support, debt relief, shelter or another non-cash form of assistance, KWF must ensure that the method satisfies the requirements adopted for ownership, authorisation and recipient benefit.

19. Zakat-funded assistance

Zakat may support eligible recipients through programmes such as:

• essential food and household support;
• urgent medical treatment and medicines;
• safe shelter and essential housing assistance;
• debt relief for eligible debtors;
• education support where structured for an eligible recipient;
• livelihood assistance that transfers a productive asset to an eligible person;
• emergency relief for eligible households;
• orphan, widow and disability support where the recipient independently meets Zakat criteria.

A project is not Zakat-eligible merely because it is beneficial. General infrastructure, institutional costs and community projects require specific scholarly consideration and must not be funded from Zakat unless the approved structure permits it.

20. Administration and delivery costs

The Qur’an identifies appointed Zakat administrators as one of the recipient categories. Scholars differ on the conditions and scope for using Zakat to meet administration and distribution costs.

KWF has chosen a donor-facing 100% Zakat policy. We therefore intend that Zakat donations received by KWF are allocated to eligible recipients rather than used for KWF’s ordinary administration.

Collection, transfer, verification, staffing, technology and distribution costs should be met from non-Zakat funding wherever reasonably possible.

If KWF wishes to change this approach or use the administrator category, it must first obtain formal scholarly approval, trustee approval and clearly notify donors before the changed treatment applies.

21. Segregation and safeguarding of Zakat funds

KWF will maintain controls to keep Zakat identifiable from general donations. These include:

• a dedicated Zakat campaign or fund code;
• separate classification in donation and accounting records;
• restricted access and approval controls;
• reconciliation between payment systems, bank records and project allocations;
• beneficiary and distribution evidence;
• review of transfers and unallocated balances;
• prohibition on intentional borrowing from the Zakat fund for general use.

Zakat may be held within the same regulated bank account as other charity funds where necessary, provided it remains clearly identified and protected in KWF’s accounting records.

22. Project changes, surplus and delayed distribution

Donors appoint KWF to distribute Zakat to eligible recipients. Unless a donation is accepted for a specifically restricted eligible case, KWF may allocate it among approved Zakat recipients according to need.

If a selected case becomes unavailable, ineligible, fully funded or cannot safely proceed, KWF may transfer the Zakat to another eligible recipient or Zakat programme.

KWF will aim to distribute Zakat promptly while allowing sufficient time for verification, safe delivery and responsible programme management. Zakat should not be left unallocated without good reason.

23. Donation errors and refunds

A donor should contact KWF promptly if Zakat was paid in error, duplicated, unauthorised or incorrectly classified.

A refund may be possible before the funds have been allocated or distributed. Once Zakat has validly been transferred to an eligible recipient, recovery may not be possible or appropriate.

KWF will consider each case under charity law, payment rules, the donor’s intention and appropriate Islamic guidance.

24. Governance and scholarly oversight

The Board of Trustees remains legally responsible for KWF’s funds and operations. Islamic questions relating to Zakat should be referred to KWF’s approved qualified scholar or advisory arrangement.

Governance should include:

• trustee approval of this policy;
• documented scholarly approval and review;
• clear operational responsibility for Zakat;
• financial controls and restricted-fund monitoring;
• sample review of beneficiary eligibility;
• escalation of difficult or unusual cases;
• management of conflicts of interest;
• periodic review of the 100% Zakat promise.

25. Records, audit trail and reporting

KWF will keep proportionate records showing:

• Zakat received and any external transaction deduction;
• the fund, campaign or programme selected;
• beneficiary eligibility and approval;
• amounts transferred or assistance delivered;
• field evidence and reconciliation;
• balances awaiting allocation;
• corrections, refunds and exceptional decisions.

Public reporting may use aggregated or anonymised information to protect beneficiary privacy and dignity.

26. Zakat calculator disclaimer

KWF’s calculator is a practical tool based on the inputs and methodology shown. It cannot identify every ownership arrangement, debt, investment, pension, business or scholarly difference.

Gold and silver prices and nisab values change. Users must check that the displayed values are current on the calculation date.

Saving a calculation, marking it paid or linking it to a donation does not amount to a binding religious ruling by KWF.

27. Individual religious questions

Seek qualified scholarly advice where your calculation involves:

• business ownership, partnerships or company shares;
• pensions, trusts, estates or jointly owned wealth;
• investment property, development or mixed intentions;
• large or disputed debts;
• cryptoassets, derivatives or complex investments;
• missed Zakat over several years;
• another school of Islamic jurisprudence;
• uncertainty over a proposed recipient or project.

KWF may explain its own policy and calculator but should not present unqualified staff or volunteers as issuing personal fatwas.

28. Approval and review

Material changes to eligibility, fund use or the 100% Zakat promise must be approved before implementation and clearly communicated to donors.

29. Contact us

For questions about a KWF Zakat donation, calculation record or eligible project:

Kashmir Welfare Foundation UK
Registered Charity Number: 1206824
Ikhlas Community Centre
127–129 Clarence Road
Derby, DE23 6LS
Phone: 020 3900 3790
Email: hello@kashmirwelfare.org.uk
Website: www.kashmirwelfare.org.uk