ELTIZAM (INVESTMENT & ZAKAT)
The following are frequently asked questions we compiled for the purpose of further explaining the use of this tool.
- What is ELTIZAM?
It is an easy to use application Guidance College has designed to calculate financial answers to questions which relate to paying Zakah and analysis of users’ compliance to Islamic standing on holdings.
- How do I use it?
Simply by plugging in numbers pertaining to the users’ holdings.
- Is my information shared with any third party?
No, ELTIZAM only calculates general information that users feed it. It is not designed for any other purpose than giving general guidelines for the user’s Zakah and Shariah Compliance. Users should always consult with their financial advisors and accountants to get accurate and real answers based on their real holdings. Guidance College can also be hired by practitioners as advisors to help guide them through any Islamic questions related to their clients. None of the information plugged in is stored or saved after the user gets their answer.
- Which Fiqh school does ELTIZAM utilize to give these answers?
We essentially use universally accepted schools of jurisprudence that adhere to Sunni methodology. Also, we highly consider the Fatawa issued by AMJA, the Assembly of Muslim Jurists of America.
- Is this application for the followers of the Islamic faith only?
Not necessarily. This application can help feed answers to academic research as well as other enterprises that serve clients. This may or may not need answers based on the Islamic standard of calculating Zakah, or compliance for the purpose of following a real value based economics and personal finance. However, in the case of followers of the Islamic faith, Zakah is simply not a matter of choice for it is obligatory based on the five pillars of Islam. We strongly recommend that the followers of Islam, Muslims, should utilize this tool to meet their obligation toward their faith.
- Is Zakah like taxes?
It is a common misconception that Zakah is simply taxes. Zakah is a separate form of distribution of wealth to the needy based on the holy book of the Quran and the Sunnah of Prophet Mohammad PBUH. It is an obligation on wealthy Muslims to redistribute some of their wealth to the needy as subscribed. Taxes are a legal obligation and Zakah is faith-based obligation. In addition, taxes are progressive or regressive whereas Zakah is a proportional. The threshold of Zakah is completely different from the widely accepted threshold of tax brackets. In short, they are totally different things.
- Can I establish a perpetual form of Zakah, like a trust?
The simple answer is yes. However, there are different rules and regulations that have to be considered. For instance, Zakah has to be distributed every year and can’t remain in the possession of the Zakah giver. Hence, Waqf is the solution, commonly known as an endowment. A Zakah contributor can simply donate his or her Zakah to an endowment that is independent. The use of Zakah can be designated to go for specific projects, earmarked for Zakah distributions. You can call us to give you advice on specific projects, the likes of education and elevate poverty foundations that qualify in the US as 501(c)(3) commonly referred to as charitable organizations.