Chapter 4: Fundamentals of Islamic Economic System by Dr. Muhammad Sharif Chaudhry



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Fundamentals of Islamic Economic System

By Dr. Muhammad Sharif Chaudhry



Means of Equitable Distribution

  1. Zakat

  2. Law of Inheritance

  3. Law of Will

  4. Law of Waqf

  5. Charity of Fitr

  6. Monetary Atonements

  7. Charity and Alms

  8. Feeding the Poor

  9. Goodly Loan to Allah

  10. Charity of Surplus

  11. Hoarding of Wealth Forbidden

  12. Prohibitive Measures

The economics of distribution signifies the sharing of wealth produced by a community among the agents, or the owners of the agents, which have been active in its production. The theory of distribution is thus concerned with the evaluation of the services of the factors of production like land, labour, capital and enterprise, and distribution of the rewards among them. But here we are not concerned with economics of distribution, rather we are concerned with social distribution of wealth which means fair and even distribution of wealth amongst the members of a community. If distribution of wealth in a community is unfair, unjust and inequitable, the social peace is always at stake and the conflict between the haves and have-nots results in bloody revolutions. Pockets of prosperity cannot survive in oceans of poverty and, therefore, fair and equitable distribution of wealth is vital to a community for its peace, well-being and ultimate prosperity.

Basic aim of Islam, as we have already stated earlier, is to ensure well-being (Falah) of its followers in this world and in the Hereafter, and also to establish brotherhood among the members of the Muslim community (Ummah). This aim cannot be achieved if distribution of wealth among the members of Muslim community is uneven, the gulf between the rich and the poor is very wide and class conflict exists in the society. Therefore, the economic system of Islam tries to establish fair and equitable distribution of wealth among the members of the Muslim community by taking very effective measures. Al-Qur’an, the revealed book of Islam, declared in unequivocal terms:”……. That it (wealth) become not a commodity between the rich among you….”(59:7). It means that the wealth should not form a circuit among the rich only, rather it should remain in circulation amongst all the members of the community meeting the genuine needs of all. That is why the Quran has strongly condemned, with threats of punishment, those who hoard wealth. “They who hoard up gold and silver and spend it not in the way of Allah, unto them give tidings (O Muhammad) of a painful doom” (9:34)

The theory of distribution of wealth as propounded by Islam is based on sound philosophy. God is owner of everything in the heavens and the earth and He is the provider and sustainer of every creature. God is real producer of wealth. No doubt man is inspired to make efforts and his efforts are rewarded, but efforts of man are fruitless, his plans abortive and his projects fail if Allah withholds His help. The Qur’an very often draws attention of man to this fact: “Have ye seen that which ye cultivate? Is it ye who foster it, or are We the Fosterer? If We willed, We verily could make it chaff……” (56:63-65). The Qur’an continues: “Have ye observed the water which ye drink? Is it ye who shed it from the rain cloud, or are We the shedder? If We willed We verily could make it bitter. Why, then give ye not thanks? Have ye observed the fire which ye strike out; was it ye who made the tree thereof to grow, or were We the grower?” (56:68-72)

Since God is the real owner and producer of wealth, so God’s share in the wealth is major and dominant. But it is also an un rebuttable fact that God is above all needs. Therefore, God’s share, as logical corollary, must go to the poor, the needy, the destitute, the helpless and the less fortunate members of the community. Share of God in the wealth of the well-to-do is collected sometimes in the form of compulsory levies like Zakat, Fitr, monetary atonements, etc. and sometimes in the form of voluntary charities and alms. It helps, overall, in smooth distribution of wealth among the poorer members of Muslim community.

For fair, just and equitable distribution of wealth, Islam prescribes positive as well as prohibitive measures. Positive measures include Zakat, laws of inheritance and other compulsory and voluntary contributions (Sadaqat). Prohibitive measures comprise prohibition of interest, prohibition of hoarding, prohibition of drinking and gambling and above all prohibition of all immoral, unfair, unjust and unlawful means of acquiring wealth which, in fact, are the major cause leading to concentration of wealth in few hands. In the following pages we will insha Allah (if God will) dilate on some of these measures adopted by Islam for effecting fair and equitable distribution.

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1-  Zakat

First such measure is Zakat which is compulsory levy or tax collected from rich by the Islamic state or the community and distributed to or spent on the poor. Before understanding its significant role in the distributive system of Islam, let us have a glance through the relevant verses of the Qur’an and the Ahadith of Muhammad (PBUH).

Verses of the Qur’an:

1.      Establish worship, pay the poor-due, and bow your heads with those who bow (in worship).


2.       Establish worship, and pay the poor-due and whatever of good ye send before (you) for your souls, ye will find it with Allah. Lo! Allah is Seer of what ye do.


3. He it is Who produceth gardens trellised and untrellised and the date-palm, and crops of divers flavour, and the olive and the pomegranate, like and unlike. Eat ye of the fruit thereof when it fruiteth, and pay the due thereof upon the harvest day, and be not prodigals. Lo! Allah loveth not the prodigals.


4. Then, when the sacred months have passed, slay the idolaters wherever ye find them, and take them (captive), and besiege them, and prepare for them each ambush. But if they repent and establish worship and pay the poor-due, then leave their way free. Lo! Allah is Forgiving, Merciful.


5.   The alms are only for the poor and the needy, and those who collect them, and those whose hearts are to be reconciled, and to free the captive and the debtor, and for the cause of Allah, and (for) the wayfarers: a duty imposed by Allah. Allah is Knower, Wise.


6.   Take alms of their wealth, wherewith thou mayst purify them and mayst make them grow, and pray for them. Lo! thy prayer is an assuagement for them. Allah is Hearer, Knower.


7.   Those who, if We give them power in the land, establish worship and pay the poor-due and enjoin kindness and forbid iniquity. And Allah’s is the sequel of events.


8.   And strive for Allah with the endeavour which is His right. He hath chosen you and hath not laid upon you in religion any hardship; the faith of your father Abraham (is yours). He hath named you Muslims of old time and in this (Scripture), that the messenger may be a witness against you, and that ye may be witnesses against mankind. So establish worship, pay the poor-due, and hold fast to Allah. He is your Protecting Friend A blessed Patron and a blessed Helper !


9.   Establish worship and pay the poor-die and obey the messenger, that haply ye may find mercy.


10.  That which ye give in usury in order that it may increase on (other) people’s property hath no increase with Allah; but that which ye give in charity, seeking Allah’s countenance, hath increase manifold.


Traditions of Muhammad (PBUH):

1.    Ibn Omar reported that the Holy Prophet said: Islam is built on five things, to bear witness that there is no deity but Allah and that Muhammad (PBUH) is His servant, to keep up prayer, to pay Zakat, to make pilgrimage and to keep fast in Ramadan.


2.   Ibn Abbas reported that the Holy Prophet sent Mu’az to Yemen saying: Certainly you will come across a people, the People of the Book. Call them to bear witness that there is no God but Allah and that Muhammad is the Messenger of Allah. If they submit to that, teach them that Allah has made obligatory upon them prayer for five times a day and a night. If they submit to that, teach them that Allah has made obligatory over them Zakat which will be taken from the rich and will be given to the poor among them. If they then obey that, avoid taking the best part of their property and fear the invocation of the oppressed, because between it and Allah, there is no veil.

-(Bukhari and Muslim)

3.   Abu Hurairah reported that the Messenger of Allah said: Whomsoever Allah gives wealth but who does not pay its Zakat, his wealth will be made to appear to him on the Resurrection day as a huge bald snake having two fangs for it. It will be put round his neck on the Resurrection day and then take hold of him with its two fangs meaning its two jaws. Afterwards it will say; I am your wealth, I am your hidden treasure. Then he recited: And let not those think who are niggardly, the verse.


4.   Ibn Omar reported that the Messenger of Allah said: Whoever acquires wealth, there is no Zakat therein till a year passed over it.


5.   Ali reported that Abbas asked the Prophet about advance payment of his Zakat before a year passed. He gave him permission for that.

-(Ibn Majah, Abu Daud, Tirmizi)

6.   Abu Hurairah reported: When the Holy Prophet was dead and Abu Bakr succeeded him, and those who returned to disbelief from desert Arabs returned to disbelief, Omar-bin-al Khattab said to Abu Bakr: How can you fight with the people while the Messenger of Allah said: I have been ordered to fight with the people till they utter: there is no deity but Allah, his property and life are under my protection except for its tax, and its account is upon Allah. Abu Bakr said: By Allah I shall surely fight against him who differentiates between prayer and Zakat, because Zakat is a duty on property. By Allah, if they refuse me to deliver young goats which they used to deliver to the Prophet of Allah, I will fight against them inspite of their refusal. Omar said: By Allah, he was not except that I saw that Allah expanded the chest of Abu Bakr for fighting. Then I recognised that it was right.

-(Bukhari and Muslim)

7.   Ali reported: Zohair said: I take it from the Prophet who said: Bring one-fourth of Ushr, meaning there is one dirham for every 40 dirhams and there is nothing on you till it completes 200 dirhams. So when it comes up to 200 dirhams, there are 5 dirhams due, and what is in excess is upon that (proportionate) account. And as for goats, there is one goat in every forty up to 120; if they increase by one, then up to 200 two she-goats (of one year); if they increase then up to 300-3 goats of one year; if you have no more than 39 goats, there is no Zakat due on you regarding them. And about cows, in every thirty there is one calf of one year, and in every forty, there is one calf of full two years, and there is no Zakat due for the cattle engaged in labour.

-(Abu Daud)

8.   Amr-bin-Shuaib reported from his father from his grandfather who said that two women came to the Holy Prophet with two bangles of gold in their hands. He asked them: Have you paid its Zakat? “No” replied they. The Holy Prophet then asked them. Do you both like that Allah will dress you with bangles of Hell? “No” replied they. He said: Then pay its Zakat.


9.   Samorah-bin-jundab reported: The Messenger of Allah used to direct us to collect Zakat from that which we counted as merchandise.

(Abu Daud)

10.  Abu Hurairah reported that the Messenger of Allah said: The wounds caused by animals are exempted, well is exempted, and mines are exempted, and there is one-fifth due from the buried treasure.

-(Bukhari and Muslim)

11.  Abu Sayeed al-Khodri reported that the Holy Prophet said: There is no Zakat for seeds or dates till they come up to 5 “Wasaqs”.


12.  Ibn Omar reported that the Messenger of Allah said about (Zakat of ) honey: For every ten leather bottles, one bottle falls due.


13.  Abdullah-bin-Omar reported from the Prophet who said: There is one tenth in what is watered by clouds or fountains or what grows in a fertile land. And there is half of one-tenth in what is watered by camels.


14.  Musa-bin-Talha reported: We had with us a letter of Mu’az-b-Jabal from the Holy Prophet. He said: The Prophet ordered him to take Zakat from wheat, barley, and dates.

-(Sharhi Sunnat (Defective)

15.  Ali reported that the Messenger of Allah said: There is no Zakat for vegetables, nor there is Zakat for cultivated plants, nor there is Zakat for less than five ‘Wasaqs’ nor there is Zakat for animals of labour, nor there is Zakat for Jabha. (Saqar said: Jabha is horse, mule and servants.)


16.   Abdullah-bin-Amr reported that the Messenger of Allah said: Zakat is not lawful for the rich, nor for one possessing health and strength.

(Tirmizi Abu Daud).

Besides having religious importance, Zakat plays very important role in the socio-economic life of the Muslim Ummah. It is the corner-stone of the financial structure of the Islamic state. Zakat not only provides the required funds to Islamic state for its welfare activities in sectors like education, health and social services but also enables it to discharge its obligations regarding its poor and deprived of citizens. It also prevents the concentration of economic power in the hands of few and ensures fair and equitable distribution of wealth. It checks growing income disparities and bridges the gulf between the rich and the poor. Thus its distribution aspect brings about social justice in the society and protects the community from bloody revolutions and political upheavals which are generally the result of ever growing disparities between   the haves and have-nots.

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2- Law of Inheritance

Law of inheritance followed by a community plays a vital role in setting the pattern of distribution of wealth among its members. Those communities who adopt law of primogeniture, which makes the eldest son to inherit the whole of the property of his father, have concentration of wealth in few hands. Those communities who confine the inheritance to only male children and exclude the females also have a narrow base of distribution. Only those communities who confer the inheritance on a larger number of heirs without any discrimination between males and females have broad-based pattern of distribution.

Islamic law of inheritance is perhaps the only such law in the world which conceives a very broad-based distribution pattern. This law not only makes the male and female children of the deceased his legal heirs but also includes among his legal heirs his spouse or spouses and his parents. In case the deceased leaves no children and no parents, his estate goes to his brothers and sisters and sometimes even to his distant kindred. In case a deceased person leaves behind him no near or distant relatives, his property may go to the community or the state for benefit of all the members or the citizens.

The basic principle of inheritance has been setup by verses 7 and 8 of chapter 4 of the Holy Qur’an. According to these verses, both men and women of a family would inherit the estate left by their parents and near relatives and something shall also be bestowed on kinsfolk, orphans and the needy who are present at the time of division of inheritance. These verses read:

Unto the men (of a family) belongeth a share of that which parents and near kindred leave, and unto the women a share of that which parents and near kindred leave, whether it be little  or much – a legal share. And when kinsfolk and the orphans and the needy are present at the division (of the heritage), bestow on them therefrom and speak kindly unto them.


The verse No. 11 of chapter 4 of al-Qur’an prescribes the shares of the children and parents of the deceased. This verse reads:

Allah chargeth you concerning (the provisions for) your children: to the male the equivalent of the portion of two females, and if there be women more than two, then theirs is two-third of the inheritance, and if there be one (only), then the half. And to his parents a sixth of the inheritance, if he have a son; and if he have no son and his parents are his heirs, then to his mother appertaineth the third; and if he have brethren, then to his mother appertaineth the sixth, after any legacy he may have bequeathed, or debt (hath been paid). Your parents or your children; Ye know not which of them is nearer unto you in usefulness. It is an injunction from Allah. Lo! Allah is Knower, Wise.


The verse No. 12 of chapter 4 of the revealed book of Islam prescribes the shares of the husband and wife in each other’s heritage. It also prescribes shares of the distant relatives in case the deceased leaves no children and no parents. This verse reads:

And unto you belongeth a half of that which your wives leave, if they have no child; but if they have a child then unto you the fourth of that which they leave, after any legacy they may have bequeathed, or debt (they may have contracted, hath been paid). And unto them belongeth fourth of that which ye leave if ye have no child, but if ye have a child then the eighth of that which ye leave, after any legacy ye may have bequeathed, or debt (ye may have contracted, hath been paid). And if a man or a woman have a distant heir (having left neither parent nor child), and he (or she) have a brother or a sister (only on the mother’s side then to each of them twain the brother and the sister) the sixth, and if they be more than two, then they shall be sharers in the third, after any legacy that may have been bequeathed or debt (contracted) not injuring (the heirs by willing away, more than a third of the heritage) hath been paid. A commandment from Allah. Allah is Knower, Indulgent.


In case the deceased is not survived by parents and children but has brothers and sisters, his or her estate shall be distributed in accordance with verse No. 176 of chapter 4 of the Holy Qur’an, which reads:

They ask thee for a pronouncement. Say: Allah hath pronounced for you concerning distant kindred. If a man die childless and he have a sister, her’s is half the heritage, and he would have inherited from her had she died childless. And if there be two sisters, then theirs are two-thirds of the heritage, and if they be brethren, men and women, unto the male is the equivalent of the share of two females. Allah expoundeth unto you, so that ye err not. Allah is Knower of all things.


The detailed discussion of Islamic law of inheritance is in fact subject of a law book or a book of Fiqh and not that of the present book. However, we can briefly say that Islamic law prescribes a long line of legal heirs who have been divided by the jurists into three classes, namely: sharers, residuaries and distant kindred. In case of non-existence of any legal heir, the estate goes to the Bait-ul-Mal (Public treasury of the  Islamic state). The main objective of the Islamic law of inheritance is, thus, the fair and equitable distribution of wealth among a larger number of near and distant kindred of the deceased, and so prevention of concentration of fortune in few hands.

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3-Law of Will

Law of will serves cause of charity and thus assists distribution of wealth among the poor and the destitute. Before elaborating the law, however, let us glance through the relevant verses of al-Qur’an and Ahadith of Prophet Muhammad (PBUH).

1.       It is prescribed for you, when one of you approacheth death, if he leave wealth, that he bequeath unto parents and near relatives in kindness. (This is) a duty for all those who ward off (evil). And whoso changeth (the will) after he hath heard it the sin thereof is only upon those who change it. Lo! Allah is Hearer, Knower. But he who feareth from a testator some unjust or sinful clause, and maketh peace between the parties, (it shall be) no sin for him. Lo! Allah is Forgiving, Merciful.


2.    Ibn Omar reported that the Messenger of Allah said: It is not proper for a Muslim who has got something to bequeath that he should pass even two nights without his will kept written near him.

-(Bukhari and Muslim)

3.       Sa’ad-bin-Abi Waqqas reported: The Holy Prophet came to me while I was ill. He asked: Have you made bequest? ‘Yes’ said I. He asked: To what extent? I replied: To the extent of the whole of my property in the way of Allah. He asked: What then have you left for your children? I replied: They are rich in wealth. He said: Bequeath one-tenth. Then I continued to think it little till he said: Bequeath one-third and one-third is too much.


4.       Abu Omama told of hearing God’s messenger say in his sermon in the year of the Farewell Pilgrimage, “God has appointed for everyone who has a right what is due to him, and no legacy must be made to an heir.” (Abu Daud and Ibn Majah).

Before the revelation of the verses regarding division of inheritance, it was prescribed that will or bequest should be made in favour of parents and near kindred. But when the Qur’an (in its chapter 4) revealed the law of inheritance and prescribed the shares of parents, children, spouses and other relatives, bequest is no longer valid in favour of an heir, as declared by the Prophet. The Holy Prophet has also prescribed that will should not be made in respect of more than one-third of total property which one is likely to leave after death. Although, in the opinion of some jurists, will can be made in favour of an heir provided all the other heirs agree yet the law of will generally understood is that will of one-third property should be made in favour of persons other than legal heirs.

The law of will generally inspires rich and well-to-do Muslims to bequeth some fortune in the path of God for charitable causes like relief of the poor, education and medical relief, etc. This law has helped, in Islamic society, the establishment of waqfs, trusts, hospitals, educational institutions. This law, thus promotes Jehad against poverty, misery, disease, ignorance and illiteracy. Thus the institution of will helps transfer of wealth from the rich to the poor.

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4-   Law of Waqf

The institution of waqf in Islam gets its inspiration from the following verses of the Qur’an and Ahadith of Prophet Muhammad (PBUH):

1.       Ye will not attain unto piety until ye spend of that which ye love. And whatsoever ye spend, Allah is aware thereof.

-(Qur’an 3:92)

2.       Ibn ‘Umar told that when ‘Umar got some land in Khaibar he went to the Prophet and said, “Messenger of God, I have acquired land in Khaibar which I consider to be more valuable than any I have ever acquired, so what do you command me to do with it?” He replied, “If you wish you may make the property an inalienable possession and give its produce as sadaqa.” So ‘Umar gave it as sadaqa declaring that the property must not be sold, given away, or inherited, and he gave its produce as sadaqa to be devoted to the poor, relatives, the emancipation of slaves, God’s path, travellers and guests, no sin being committed by the one who administers it if he eats something from it in a reasonable manner or gives something to someone else to eat, provided he is not storing up goods (for himself). Ibn Sirin said, “provided he is not acquiring capital for himself.”

-(Bukhari and Muslim)

The institution of waqf, thus, got its roots when verse 92 of chapter Three of the Holy Qur’an was revealed and the well-to-do companions of the Prophet sought his guidance expressing their desire to donate their property in the path of Allah. So the followers of Islam throughout their history have been maintaining this institution to earn the pleasure of Allah in this world and in the Hereafter. As stated earlier, a Muslim can bequeth one-third of his property for charity after his death. But during his lifetime he has right to spend whole of his property in the way of Allah. According to law of gift, one can donate or gift as much of his property as he likes to any person during his life. Good-natured and virtuous believers, who are rich, exercise their powers under the law of will or the law of gift and establish waqf for a charitable cause.

Waqf, in the language of Shariah, means the dedication of the corpus of property to Almighty God. The property thus transfers from the dedicator (waqif) to the ownership of Allah but its usufruct or benefit is dedicated to the poor, sick, travellers, or any other noble cause recognised by Islam.

The institution of waqf helps elimination of poverty, misery, disease, illiteracy and in this way promotes the cause of equitable distribution of wealth.

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5-  Charity of Fitr

The Prophet of Islam has prescribed for every well-to-do Muslim to pay Sadaqat-ul-Fitr to the poor Muslims to enable them to participate in the celebrations of Eid after the Holy month of Ramadan. Fitr means alms which is incumbent upon every Muslim possessing property equal to the amount of Nisab of Zakat. The well-to-do are required to pay it not only for themselves but also for their families, children, servants and slaves. The measure of Eid charity in wheat, flour, barley, dates, etc. is one Sa’a which is equivalent to 112 ounces, nearly 3.5 seers. It is also lawful to pay the equivalent price. The charity can be paid in the month of Ramadan but it should certainly be paid before Eid prayer so that the wants of the poor in connection with the Eid festival are satisfied and they also enjoy the festival.

Some of the Ahadith of the Prophet are reproduced below to understand the importance of this charity and its rules:

1.       Ibn Omar reported that the Messenger of Allah made obligatory the charity of ‘Fitr’-one sa’a of dried dates or one sa’a of barley upon the slave and the free, male and female, young and old from among the Muslims. He directed its payment before the people go out for the prayer.

-(Bukhari, Muslims)

2.       Abu Sayeed al-Khodri reported: We used to levy charity of Fitr-one sa’a from food crops, or one sa’a from barley, or one sa’a from dried dates, or one sa’a from ‘cheese, or one sa’a from raisins.

-(Bukhari, Muslim)

3.       Ibn Abbas reported that the Messenger of Allah made charity of Fitr compulsory as a purification of fast from vile discourse and vain talks and also as food to the poor.

-(Abu Daud)

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6-  Monetary Atonements

Monetary atonements have been prescribed by the Qur’an for certain sins. Those who commit certain sins, offences or omissions intentionally or unintentionally have been enjoined upon by the Qur’an to make prescribed charity in expiation of these sins. The Verses of the Qur’an relevant to some atonements are reproduced as under:

1.       (Fast a certain number of days) and (for) him who is sick among you, or on a journey, (the same) number of other days; and for those who can afford it there is a ransom: the feeding of a man in need – But whoso doth good of his own accord, it is better for him: and that ye fast is better for you if ye did but know.


2.       It is not for a believer to kill a believer unless (it be) by mistake. He who hath killed a believer by mistake must set free a believing slave, and pay the blood-money to the family of the slain, unless they remit it as a charity. If he (the victim) be of a people hostile unto you, and he is a believer, then (the penance is) to set free a believing slave. And if he cometh of a folk between whom and you there is a covenant, then the blood-money must be paid unto his folk and (also) a believing slave must be set free. And whoso hath not the wherewithal must fast two consecutive months. A penance from Allah. Allah is Knower, Wise.


3.       Allah will not take you to task for that which is unintentional in your oaths, but He will take you to task for the oaths which ye swear in earnest. The expiation thereof is the feeding of ten of the needy with the average of that wherewith ye feed your own folk, or the clothing of them, or the liberation of a slave, and for him who findeth not (the wherewithal to do so) then a three days’ fast. This is the expiation of your oaths when ye have sworn; and keep your oaths. Thus Allah expoundeth unto you His revelations in order that ye may give thanks.


4.       Those who put away their wives (by saying they are as their mothers) and afterward would go back on that which they have said, (the penalty) in that case (is) the freeing of a slave before they touch one another. Unto this ye are exhorted; and Allah is Informed of what ye do. And he who findeth not (the wherewithal), let him fast for two successive months before they touch one another; and for him who is unable to do so (the penance is) the feeding of sixty needy ones. This, that ye may put trust in Allah and His messenger. Such are the limits (imposed by Allah); and for disbelievers is a painful doom.


These prescribed monetary atonements are also a channel of flow of wealth from the well-to-do to the poor people.

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7-  Charity and Alms

After discussing compulsory charities, now we turn to optional charities and alms. If Zakat and other compulsory charities fail to satisfy the needs of the poor, the state can either impose taxes or motivate the rich to donate voluntarily and generously to help eradicate poverty and want. Let us reproduce the verses of the Holy Book and Ahadith of Muhammad (PBUH) regarding Sadaqat or Infal fi Sabil Allah.

Verses of the Qur’an:

1. Who believe in the unseen and establish worship, and, spend of that We have bestowed upon them; And who believe in that which is revealed unto thee (Muhammad) and that which was revealed before thee, and are certain of the Hereafter. These depend on guidance from their Lord. These are the successful.

-(2 : 3-5)

2.       It is not righteousness that ye turn your faces to the East and the West; but righteous is he who believeth in Allah and the Last Day and the angels and the Scripture and the Prophets; and giveth his wealth, for love of Him, to kinsfolk and to orphans and the needy and the wayfarer and to those who ask, and setteth slaves free; and observeth proper worship and payeth the poor-due and those who keep their treaty when they make one, and the patient in tribulation and adversity and time of stress, such are they who are sincere. Such are the Godfearing.


3.       Spend your wealth for the cause of Allah, and be not cast by your own hands to ruin; and do good. Lo! Allah loveth the beneficent.


4.       They ask thee, (O Muhammad), what they shall spend. Say: That which ye spend for good (must go) to parents and near kindred and orphans and the needy and the wayfarer. And whatsoever good ye do, Lo! Allah is Aware of it.


5.       And they ask thee what they ought to spend. Say: That which is superfluous. Thus Allah maketh plain to you (His) revelations, that haply ye may reflect:


6.       O ye who believe! Spend of that wherewith We have provided you ere a day come when there will be no trafficking, nor friendship, nor intercession. The disbelievers, they are the wrong-doers.


7.       The likeness of those who spend their wealth in Allah’s way is as the likeness of a grain which groweth seven ears, in every ear a hundred grains. Allah giveth increase manifold to whom He will. Allah is All-Embracing, All-Knowing. Those who spend their wealth for the cause of Allah and afterward make not reproach and injury to follow that which they have spent: their reward is with their Lord, and there shall no fear come upon them, neither shall they grieve. A kind word with forgiveness is better than alms-giving followed by injury. Allah is Absolute, Clement. O ye who believe! Render not vain your almsgiving by reproach and injury, like him who spendeth his wealth only to be seen of men and believeth not in Allah and the Last Day. His likeness is as the likeness of a rock whereon is dust of earth; a rainstorm smiteth it, leaving it smooth and bare. They have no control of aught of that which they have gained. Allah guideth not the disbelieving folk. And the likeness of those who spend their wealth in search of Allah’s pleasure, and for the strengthening of their souls is as the likeness of a garden on a height. The rainstorm smitheth it and it bringeth forth its fruit twofold. And if the rainstorm smite it not, then the shower. Allah is Seer of what ye do.


8.   Whatever alms ye spend or vow ye vow, Lo! Allah knoweth it. Wrong-doers have no helpers. If ye publish your alms-giving, it is well, but if ye hide it and give it to the poor, it will be better for you, and will atone for some of your ill deeds, Allah is Informed of what ye do. The guiding of them is not thy duty ( O Muhammad ) , but Allah guideth whom He will. And whatsoever good thing ye spend, it is for yourselves, when ye spend not save in search of Allah’s countenance; and whatsoever good thing ye spend, it will be repaid to you in full, and ye will not be wronged. (Alms are) for the poor who are straitened for the cause of Allah, who cannot travel in the land (for trade). The unthinking man accounteth them wealthy because of their restraint. Thou shalt know them by their mark: They do not beg of men with importunity. And whatsoever good thing ye spend, Lo! Allah knoweth it. Those who spend their wealth by night and day, by stealth and openly, verily their reward is with their Lord, and there shall no fear come upon them neither shall they grieve.


9.   Allah hath blighted usury and made almsgiving fruitful. Allah loveth not the impious and guilty.


10.  Ye will not attain unto piety until ye spend of that which ye love. And whatsoever ye spend, Allah is aware thereof.


11.  Believe in Allah and His messenger, and spend of that whereof He hath made you trustees; and such of you as believe and spend (aright), theirs will be a great reward.


12.  And spend of that wherewith  We have provided you before death cometh unto one of you and he saith: My Lord! If only Thou wouldst reprieve me for a little while, then I would give alms and be among the righteous.


13.  Let him who hath abundance spend of his abundance, and he whose provision is measured, let him spend of that which Allah hath given him. Allah asketh naught of any soul save that which He hath given it. Allah will vouchsafe, after hardship, ease.


14.  And in whose wealth there is a right acknowledged. For the beggar and the destitute;


Ahadith of Muhammad (PBUH):

1. Anas reported that the Messenger of Allah said: verily charity appeases wrath of the Lord and removes pangs of death.


2.   Abdullah-bin-Mas’ud reported: There are three whom Allah loves-a man who gets up at night to read the Book of Allah, and a man giving alms with his right hand which he conceals (I consider that he said) from his left hand: and a man, being in a battalion, encounters the enemies, although his companions are routed.


3.   Marsad-bin-Abdullah reported: Some of companions of the Holy Prophet informed me that he heard the Prophet say: Surely the shade of the believer on the Resurrection Day will be his charity.


4.   Abu Hurairah reported that the Messenger of Allah said: Had there been gold for me like the mount of Uhud, it would have pleased me that three nights should not pass over me with something with me therefrom except what I should keep in wait for debt.


5.   Asmma’s reported that the Messenger of Allah said: Spend and don’t count lest Allah counts for you, and don’t hoard up lest Allah withhold from you. Spend what you can.

-(Bukhari, Muslim)

6.   Abu Hurairah reported that a man enquired: O Messenger of Allah! which charity is greatest in reward? He replied: Your charity while you are sound, greedy, fear poverty and hope for riches. Don’t put off, till when it reaches the throat, you say: Such and such is for so and so, such and such is for so and so, while it belonged to so and so.

-(Bukhari, Muslim)

7.   Abu Hurairah reported that the Messenger of Allah said: The generous man is near Allah, near Paradise, near the people and, far off from Hell; and the miser is far off from Allah, far off from Paradise, far off from the people near Hell; and illiterate charitable man is dearer to Allah than the pious miser.


Voluntary charities to earn the pleasure of God almighty are rewarded in this world as well as in the next one. These also help in flow of wealth from the rich of the community to the poor and needy. Thus the cause of distributive and social justice is achieved through this voluntary measure.

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8-  Feeding the Poor

Feeding the poor is one of the voluntary charities and is a very common practice among the generous and pious Muslims.

Rewards for this are very numerous and both the Qura’n and the Prophet of Islam inspire the believers to feed the poor and the needy. This measure is also a good step to mitigate want and misery from the Islamic society. The relevant verses and Ahadith are:

Verses of the Quran:

1. That they may witness things that are of benefit to them, and mention the name of Allah on appointed days over the beast of cattle that He hath bestowed upon them. Then eat thereof and feed therewith the poor unfortunate.


2.   And the camels! We have appointed them among the ceremonies of Allah. Therein ye have much good. So mention the name of Allah over them when they are drawn up in lines. Then when their flanks fall (dead), eat thereof and feed the beggar and the suppliant. Thus have We made them subject unto you, that haply ye may give thanks.


3.   (Because) they perform the vow and fear a day whereof the evil is wide-spreading. And feed with food the needy wretch, the orphan and the prisoner, for love of Him. (Saying): We feed you, for the sake of Allah only. We wish for no reward nor thanks from you. Lo! We fear from our Lord a day of frowning and of fate. Therefore, Allah hath warded off from them the evil of that day, and hath made them find brightness and joy;


Ahadith of the Prophet:

1. Abdullah-bin-Amr reported that the Messenger of Allah said: Serve the Merciful, give food and spread peace; you will then enter paradise with peace.

(Tirmizi, Ibn Majah)

2.   Ibn Abbas reported: I heard the Messenger of Allah say: No Muslim gives a cloth to a Muslim except that he is in the protection of Allah so long as a piece thereof remains upon him.

(Ahmad, Tirmizi)

3.   Abu Hurairah reported that a man complained to the Holy Prophet about his hardness of heart. He said: Pass thy hand over the head of the orphans and give food to the poor.


4.   Anas reported that the Messenger of Allah said: The best charity is to satisfy a hungry belly.


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9-  Goodly Loan to Allah

It is grace of Allah, the Almighty God, that any expense incurred by a person in His path on charity or alms to the poor is regarded by Him as goodly loan to Him and He undertakes to repay it manifold. The rich are inspired to give loan to God in the form of helping the poor people and to earn many times big rewards for this. The verses of the Qur’an pertaining to this subject are:

1.   Who is it that will lend unto Allah a goodly loan, so that He may cause it increase manifold? Allah straiteneth and enlargeth. Unto Him ye will return.


2.   Allah made a convenant of old with the Children of Israel and We raised among them twelve chieftains, and Allah said: Lo! I am with you. If ye establish worship and pay the poor-due, and believe in My messengers and support them, and lend unto Allah a kindly loan, surely I shall remit your sins, and surely I shall bring you into gardens underneath which rivers flow. Whoso among you disbelieveth after this will go astray from a plain road.


3.       Who is he that will lend unto Allah a goodly loan, that He may double it for him and his may be a rich reward?


4.   Lo! those who give alms, both men and women, and lend unto Allah a goodly loan, it will be doubled for them, and theirs will be a rich reward.


5.   If ye lend unto Allah a goodly loan, He will double it for you and will forgive you, for Allah is Responsive, Clement.


Following are comments of two leading scholars of Islam on the concept of goodly lean to God:

According to Abdullah Yusuf Ali: “Spending in the cause of God is called metaphorically “a beautiful loan”. It is excellent in many ways: (1) it shows a beautiful spirit of self-denial; (2) in other loans there may be a doubt as to the safety of your capital or any return thereon: here you give to the Lord of All in Whose hands are the keys of want or plenty: giving, you may have manifold blessings, and withholding, you may even lose what you have. If we remember that our goal is God, can we turn away from His cause?

According to Abul A’la Maududi: Good loan” is that which is lent without any idea of personal gain or interest but is given with the sole intention to please Allah. Allah in His bounty credits the wealth thus spent in His Way as a loan to Himself. He promises that He will not only return the actual debt but increase it manifold, provided that it is a goodly loan in the real sense and is lent merely to please Him and for the sake of those objects He approves.

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10- Charity of Surplus

The highest degree of charity, which has always remained an ideal for a Muslim, is the charity of surplus (Anfaq al-Afw). It requires a believer to spend all his wealth which is over and above his needs. The word Afw means that wealth which is left over after meeting one’s needs. The Injunction of the Qur’an on spending surplus wealth is:……………And they ask thee what they ought to spend. Say: That which is superfluous. Thus Allah maketh plain to you (His) revelation, that haply ye may reflect.”    -(2 : 219)

If the principle of Anfaq al-Afw comes into play in its full force and all the believers voluntarily spend all their wealth in the way of God, there will be no poverty, no disease, and no illiteracy in the Muslim society. The cause of distribution of wealth cannot be served better by any measure than this.

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11- Hoarding of Wealth Forbidden

Hoarding of wealth has been condemned by Islam with threats of severe punishment whereas circulation of wealth has been ordained. This measure not only forces the hoarded wealth out of coffers of the rich but also ensures its flow into investment channels ultimately helping its natural distribution. Following are Verses of the Qur’an and Ahadith of Muhammad (PBUH) which highlight Islamic view-point on hoarding:-

1.   They who hoard up gold and silver and spend it not in the way of Allah, unto them give tidings (O Muhammad) of a painful doom: On the Day when it will (all) be heated in the fire of hell, and their foreheads and their flanks and their backs will be branded there with (and it will be said unto them): Here is that which ye hoarded for yourselves. Now taste of what ye used to hoard.

-(Al-Qur’an 9:34-35)

2.       That which Allah giveth as spoils unto His messenger from the people of the townships, it is for Allah and His messenger and for the near of kin and the orphan and the needy and the wayfarer, that it becometh not commodity between the rich among you…………….

-(Al-Qur’an 59:7)

3.       But nay! for lo! it is the fire of hell, Eager to roast, It calleth him who turned and fled (from truth), And hoarded (wealth) and withheld it.

-(Al-Qur’an 70:15-18)

4.       Woe unto every slandering traducer. Who hath gathered wealth (of this world) and arranged it: He thinketh that his wealth will render him immortal. Nay, but verily he will be flung to the Consuming One.

-(Al-Qur’an 104:1-4)

5.       Abu Hurairah reported that the Messenger of Allah used to store up nothing for the morrow.


6.       Ayesha reported that the Messenger of Allah said: This world is an abode for one who has got no abode, and a property for one who has got no property, and one who has got no wisdom hoards for it.

-(Ahmad, Baihaqi) 

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12- Prohibitive Measures

It is a notorious fact that concentration of wealth in few hands usually takes place through unlawful means and corrupt practices adopted for acquiring wealth. It is through unfair and illegal means that few privileged individuals pile up big fortunes depriving the multitude of people from their legitimate share in national wealth. If natural process of distribution of wealth is allowed to flow unobstructed and all persons earn their livelihood through lawful means there cannot be concentration of wealth in few hands and there cannot be unbridgeable gulf between the rich and the poor. Thus the means adopted for earning play a vital role in governing distribution of wealth in a state or a community.

With a view to prevent concentration of wealth and ensure its fair and equitable distribution, Islam has adopted certain prohibitive measures, i.e. all the unjust, unfair and illegal means of earning have been declared Haram (unlawful) and hence prohibited. Following are some of these measures:-

1.       Riba or usury in every conceivable form has been abolished root and branch.

2.       Bribery and corruption in every form is haram (unlawful).

3.       Earning through wine, hard drinks, narcotics and other forbidden things is illegal.

4.       Earning through gambling, speculation, forward sale, and games of chance is absolutely prohibited.

5.       Theft and robbery are prohibited and declared punishable offences.

6.       Income through adultery, prostitution, music, dancing, blue films, obscene literature, pornography, etc. is haram.

7.       Business malpractices such as wrong measuring and wrong weighing, adulteration, etc. are forbidden.

8.       Usurpation of the wealth of orphans, women and other weak persons is haram.

9.       Hoarding of commodities especially food items and other necessities of life with a view to earn undue profits is prohibited.

10.   Earning through exploitation, blackmail, fraud, duress, deception, false oaths, misrepresentation of goods, is prohibited.

11.   Financial benefits derived through misuse of office or power or through intercession, favouritism, nepotism, etc., are illegal.

12.   Non-payment of debt or loan including loans of banks and financial institutions or remission of these loans secured through political or other influence is unlawful.

13.   Embezzlement of individual or public money or misappropriation thereof, is absolutely haram.

14.   Non-payment of Zakat and other taxes or non-payment of dues for utilities and services is strictly prohibited.

15.   Non-payment of wages or salaries to the labourers or employees is forbidden.

The above mentioned means of earning livelihood or acquiring and accumulating wealth have been prohibited directly or indirectly by the Qur’an and the Sunnah. These have already been discussed under the head “unlawful means of earning wealth” in previous chapter and, therefore, there is no need of repeating the discussion here.

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