Zakah in Non-Islamic Countries: Addressing Economic Struggles and Religious Commitments of Muslims in India

Abstract

The research aims to examine the economic struggles faced by Muslims residing in non-Islamic countries using the case of Indian Muslims as an example. In these contexts, Muslims encounter difficulties in adhering to both national tax laws and Islamic Sharia principles. These economic conditions not only make it challenging to fulfill their religious obligations but also place the Muslim community at a disadvantage. The study primarily focuses on analyzing the treatment of the third pillar of Islam, "Zakah," and how its significance diminishes due to various factors present in non-Islamic societies. The research deeply probes the reasons why investment in precious metals (especially Gold) is comparatively less beneficial for Muslims than for non-Muslims, owing to Zakah obligations. It further explores the challenges faced by the community in identifying Sharia-compliant investment opportunities amid inflation, as well as their refusal to accept bank interest as compensation for inflation - factors that have a macroeconomic impact on their financial growth. The study also explores the inefficiencies in Zakah fund distribution caused by the absence of a centralized regulatory authority. Without an institutionalized framework for collection and allocation, the fund’s potential impact on poverty alleviation remains significantly constrained. The findings advocate for a harmonized mechanism to optimize Zakah deployment, ensuring measurable improvements in socio-economic conditions in non-Islamic countries where similar challenges persist.