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Cash is the physical money which can be in the form of banknotes and coins. It is used as a medium of exchange in everyday transactions. It is also considered the most liquid asset since. It can be used immediately to settle transactions without conversion, therefore it is considered as most liquid asset.
Cash acts as a source to buy goods and services which is accepted universally. Unlike barter, (dealing in goods) cash is the standard value which facilitates smooth exchanges.
It serves as a standard numerical unit of measurement for the market value of goods, services, and financial assets, which is helpful in setting prices and comparing values.
Cash allows individuals to save and preserve wealth over time, until inflation is managed, although its value is badly affected by inflation.
Governments designate cash as legal tender, meaning it must be accepted as a form of payment within the country.
Cash is produced and regulated by a country’s central bank. It is printed in specific denominations and serves as the face-to-face representation of the country's currency.
In daily life, cash is exchanged directly during transactions. For example, when you buy a coffee or pay for transportation, cash is handed over, completing the exchange instantly.
Because cash is readily available and does not require electronic systems to verify transactions, it remains the most liquid form of money. It is also the fallback option when electronic payment systems are unavailable.
While cash transactions can be more challenging to trace compared to digital payments, businesses and individuals maintain records to track cash inflows and outflows for budgeting and financial accountability.
In Islamic finance, cash is considered one of the zakatable assets if it is held above the minimum threshold (nisab) for a lunar year.
The nisab for cash is usually determined based on its equivalent value in gold (or silver). For example, if the nisab is set by the value of 87.48 grams of gold, cash holdings that exceed this value (as determined by current market rates) become liable for zakat.
Once your cash holdings exceed the nisab and you have maintained this amount for one full Islamic (lunar) year, you pay zakat at a standard rate of 2.5%.
Example:
If you have $10,000 in cash, and it exceeds the nisab, your zakat due would be:
Zakat= 2.5% x cash
Zakat due= 0.025 x 10000$
Zakat due= 250$
Paying zakat on cash not only helps in purifying wealth by detaching excessive accumulation but also supports the community by providing funds for those in need.
Zakat on cash calculator is designed to help Muslim to fulfill their obligation in payment of zakat. Calculating zakat manually can lead to errors specially when you have multiple sources of income and there is multiple variation. Iur calculator ensures to apply 2.5% of zakat rule on your whole cash. Nisab is based on current market value, therefore our calculator automatically convert by fetching live currency rates. This is very helpful even if you have the cash in multiple currencies. Instead of adding multiple cash assets manually, calculator sums up instantly which saves your precious time. Our reliable tool is the source of your peace of mind that you are fulfilling your obligation accurately.
The core feature of our zakat on cash calculator is its ability to fetch live currency rates, no matter in what currency you want to calculate your zakat. It contains almost all the currencies of the world with instant rates. Its user interface is simple and intuitive. No registration or subscription is required. It is a free and online tool.
It is straightforward to use our calculator. Simply enter your cash and liabilities such as loan, debt etc (if any) and hit the calculate button to see the results.