Zakaat & Charity

Question:

 

From my understanding, Zakat is payable on monies available and accessible to one over a period, however, pension and provident fund investments are not available to us in any given period until we reach the age of retirement? Technically we should be paying Zakat when money of this nature is received and not current values as we are not in possession of this?

 

Similarly, I received company performance shares (BEE), only payable after a period of between 3 – 5 years, If you leave the employ of that company during this period you forfeit the shares, the share is only available to you after a set period, my understanding, zakat is payable at the time the  money is available to you or paid to you?  I don’t own that share now.

 

Answer:

 

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

 

1. If one makes a voluntary contribution in the form of premiums to a pension or provident fund, then the premiums amount is zakatable. If the premiums are compulsory and deducted from ones wages and the employee has no option, then the entire amount is exempt from zakat. If the premiums are paid voluntarily, then the premium amount is zakatable.

2. The BEE shares are exempt from zakat.

 

And Allah Knows Best. 

Mufti Ebrahim Desai. 

Question:

If Zakaat was overpaid previously, can it be carried forward to the following years?

 

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

 

Yes, overpaid Zakat will be considered as advance Zakat payments for the future years.

 

And Allah Knows Best.

Mufti Ebrahim Desai 

Zakat FAQs

 

Q: Upon whom is Zakāt compulsory?

A: Zakat is compulsory on every sane, mature Muslim who is owner of Zakātable assets equivalent to the Nisab after a passing of a lunar year.

Q: Who is regarded to have nisab?

A: A person who has Zakātable assets equivalent to or more than the Nisāb after deducting liabilities will qualify as a Nisāb holder.

Q: What is Nisāb?

A: The Nisāb is a threshold. One who possesses Zakātable assets equivalent to the Nisāb amount, will be regarded as a Nisāb holder and will have to check one lunar year later if he still possesses nisab amount to pay Zakāt.

Q: What is the value of Nisāb?

A: The Nisāb is the value of 612.36 grams of silver.

Q: How much will I have to pay?

A: One will have to give 2.5% of one’s total net assets.

Q: What if one’s wealth fluctuates during the course of the year?

A: It makes no difference whether one’s wealth increases or decreases during the course of the year. Only if one becomes insolvent then one’s Nisāb date will expire.

Q: Is there Zakāt on one’s house and car?

A: There is no Zakat on personal items which take the form of living necessity. e.g. a house, clothes, utensils, furniture, car and all household appliances without which life would fall into difficulty etc.

Q: Is intention necessary?

A: Intention at the time of giving Zakāt is a pre-requisite for the valid discharge of Zakāt.

Q: Can a husband pay Zakāt on behalf of his wife?

A: It is permissible to discharge somebody else’s Zakāt from one’s own wealth on condition one has approval and acknowledgement from the other party.

Q: Is Zakāt compulsory on personal gold?

A: Zakāt is compulsory on gold & silver in one’s ownership for whatever reason and whichever form.

Q: Is Zakāt binding on cash in a bank account?

A: Zakāt is obligatory on all cash whether in one’s physical possession or in a bank account.

Q: Do I have to pay Zakāt on money I have given to a brother as a loan?

A: Zakāt is compulsory on debt receivables arising from forwarding a loan or selling stock on credit. The total outstanding balance will be added to one’s gross assets.

Q: I am in debt; do I deduct my debts when calculating Zakāt?

A: Debts are deductible from your Zakatable total if they are to be repaid in full within the next 12 months.

Debts not repayable at all in the next 12 months are NOT deductible.

If debts are payable by instalment, then 12 months debt is deductible.

Q: Is Zakāt compulsory on social security allowances?

A: Zakāt is payable on the beneficiary of Working Tax Credit, Child Tax Credit, Child benefits and all other forms of social security allowances.

Q: I have a business, do I have to pay Zakāt on anything?

A: Zakāt is compulsory on one’s business stock and will be calculated according to the retail price of the goods. There is no zakat upon the fixed assets in a business.

Q: Do I have to pay Zakāt on shares?

A: The value of shares purchased to resell is Zakātable.

Q: We manufacture goods. Do we have to pay Zakāt on those goods?

A: For businesses involved in manufacturing goods, all finished goods must be valued at their sale price, and all unfinished goods at market price.

Q: I have not paid Zakāt for years. What do I do?

A: If one failed to give Zakāt for previous years, one should estimate how many years were missed and how much one’s nets assets were each year and give Zakāt accordingly.

Q: Who can I give Zakāt to?

A: Zakāt can only be given to either a needy person who does not own in excess of his personal needs any surplus asset that is equal to the value of Nisāb or a debtor whose liabilities exceed Zakātable and surplus assets.

Zakāt cannot be given to construction projects, rich people, non-Muslims or the descendants of ‘Abbas, Harith, Ja’far and Aqeel Radhiallahu anhum.

One cannot give Zakāt to one’s parents, grandparents, children or spouse.

It is permissible to give Zakāt to one’s needy brother or sister.

 

Darul Fiqh

Can the husband pay Zakat on behalf of his wife?

 

Question:

A couple has a certain amount of gold which is in the custody of the wife. Will she have to pay on her own or can her husband pay on her behalf?

 

Answer:

 

In the Name of Allah, the Most Gracious, the Most Merciful

As-salāmu ʿalaykum wa-raḥmatullāhi wa-barakātuh

 

Zakāt is liable on the owner of the gold. The owner is the person who bought it, was gifted it or inherited it.

 

Therefore, if the wife owns the gold, she is responsible to pay the Zakāt of the gold. However, the husband may pay its Zakāt on her behalf.[1]

 

And Allah Taʿālā Knows Best

 

Checked and Approved by

Mufti Ebrahim Desai

 



[1] وَلَوْ تَصَدَّقَ عَنْهُ بِأَمْرِهِ جَازَ وَيَرْجِعُ بِمَا دَفَعَ عِنْدَ أَبِي يُوسُفَ، وَإِنْ لَمْ يَشْتَرِطْ الرُّجُوعَ كَالْأَمْرِ بِقَضَاءِ الدَّيْنِ، وَعِنْدَ مُحَمَّدٍ لَا رُجُوعَ لَهُ إلَّا بِالشَّرْطِ، وَتَمَامُهُ فِي الْخَانِيَّةِ (البحر الرائق (2/ 227))

وَلَا يُؤَدِّي عَنْ زَوْجَتِهِ، وَلَا عَنْ أَوْلَادِهِ الْكِبَارِ، وَإِنْ كَانُوا فِي عِيَالِهِ، وَلَوْ أَدَّى عَنْهُمْ أَوْ عَنْ زَوْجَتِهِ بِغَيْرِ أَمْرِهِمْ أَجْزَأَهُمْ اسْتِحْسَانًا كَذَا فِي الْهِدَايَةِ. وَعَلَيْهِ الْفَتْوَى كَذَا فِي فَتَاوَى قَاضِي خَانْ. وَلَا يَجُوزُ أَنْ يُعْطِيَ عَنْ غَيْرِ عِيَالِهِ إلَّا بِأَمْرِهِ كَذَا فِي الْمُحِيطِ. (الفتاوى الهندية، دار الفكر (1/ 193))

 

Zakaat on Al-Mabroor Investment Scheme

 

Question:

 

1) How is zakaat to be calculated on the Al Mabroor Buffalo Investment?

 

2) How much zakaat should I pay for the Mandela R5 coins. I paid a few thousand for them because of their rarity. The coins are still circulation coins. That is, if I go into a shop, they would accept it as a R5(the legal tender value).  There is no gold or silver in the coins.

The only difference is that they have been graded by a coin company(to show what condition the coin is in).

 

 

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

There are three issues:

1. Generally, in the Al-Mabroor Mudarabah Investment Scheme , one invests in the scheme with the intention of purchasing buffaloes for breeding purposes. As such, there is no Zakaat payable on the buffalo. However, if there is cash on hand for administrative expenses and other expenses, then the Zakaat will be due on the cash on hand on a pro-rata basis on the investors based on their personal financial situation. For example, if the fund has ten million rands. Eight million rands was used to purchase a buffalo. Two million rand in cash on hand is reserved for expenses. There will be Zakaat on the two million rand on a pro-rata basis.

2. However, if one invests in the Al-Mabroor Buffalo Scheme with the intention of purchasing buffalo for resale and capital gain., then they will be treated as merchandise.  Hence, the laws of zakāt on merchandise will be applicable and not the laws pertaining to zakāt on animals[1]

Zakāt is obligatory on the current market value on the day of calculating one’s zakāt.  For example, a person invested R3 million in the Al Mabroor Buffalo Scheme.  On the day of calculating one’s zakāt, the market value of one’s investment is R 3,500,000.  If one’s liabilities do not exceed one’s assets, then such a person will be obligated to pay zakāt of 2.5% of R 3,500,000 plus the value of other zakātable assets.[2]

3. In principle, Zakaat is Wajib on legal tender/legal currency. Therefore, Zakaat will be wajib on the actual R5 Mandela Coin and not the value of the Mandela Coin since Mandela Coins are classified as legal tender. For example, one owns 1000 R5 Mandela Coins with the value of each coin being R1000.00. Such a person will be obligated to pay Zakaat on R5000.00 and not on R 100000.00.

And Allah Ta’āla Knows Best                                       

Ismail Desai,
Student Darul Iftaa
Durban, South Africa

Checked and Approved by,
Mufti Ebrahim Desai.



1 بَابُ السَّائِمَةِ (هِيَ) الرَّاعِيَةُ، وَشَرْعًا (الْمُكْتَفِيَةُ بِالرَّعْيِ) الْمُبَاحِ، ذَكَرَهُ الشُّمُنِّيُّ (فِي أَكْثَرِ الْعَامِ لِقَصْدِ الدُّرِّ وَالنَّسْلِ) ذَكَرَهُ الزَّيْلَعِيُّ، وَزَادَ فِي الْمُحِيطِ (وَالزِّيَادَةِ وَالسِّمَنِ) لِيَعُمَّ الذُّكُورَ فَقَطْ، لَكِنْ فِي الْبَدَائِعِ لَوْ أَسَامَهَا لِلَّحْمِ فَلَا زَكَاةَ فِيهَا كَمَا لَوْ أَسَامَهَا لِلْحَمْلِ وَالرُّكُوبِ وَلَوْ لِلتِّجَارَةِ فَفِيهَا زَكَاةُ التِّجَارَةِ (الدر المختار من حاشية ابن عابدين ج 2 ص 276 أيج أيم سعيد)

2أحسن الفتاوى ج 4 ص 287 أيج أيم سعيد

أحسن الفتاوى ج 4 ص 284 أيج أيم سعيد

يقوِّم التاجر العروض أو البضائع التجارية في آخر كل عام بحسب سعرها في وقت إخراج الزكاة، لا بحسب سعر شرائها، ويخرج الزكاة المطلوبة (الفقه الإسلامي وأدلته ج 3 ص 1871 دار الفكر)

KHARWASTAN

Join Our Mailing List (B.E.E.P) - Business Educational Empowerment Programme