The Zakat of Property

The Zakat of Property This letter describes when to pay and how to calculate the amount of the Zakat of money.  Zakat is a certain amount of money that every adult, free, mentally stable, and financially able Muslim, male and female, has to pay to support the specific categories mentioned in the surah (verse) of At-Tawbah. Allah azza wa jall says: "Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to Truth); for those in bondage and in debt; in the Cause of Allah; and for the wayfarer: (thus is it) ordained by Allah, and Allah is full of knowledge and wisdom." (The Holy Qur'an 9:60). The obligatory nature of Zakat is firmly established in the Qur'an, the Sunnah (or hadith), and the ejmaa' (the...

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Zakat paid on property

Question: I had some inheritance money which was lying as cash for 2 years but now i have bought some property from that money. My intention is not clear at this point whether I will sell this property or use it to build a house for my self. Yes i have to pay zakat on the cash i kept for two years. But please let me know, will I have to pay zakat on this land? Answer:Walaikum assalam wa rahmatullah, I pray this finds you in the best of health and spirits. You would not have to pay zakat on the property at present, because the default is that land is acquired for personal ownership. If you then sell it, zakat would be due (with other zakatable wealth) on the funds. (Ibn Abidin, Radd al-Muhtar) Please search SunniPath Answers (http://qa.sunnipath.com) for related answers. Faraz...

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Liabilities

X. Liabilities If there is any Income Tax or Sales Tax payable to Government on the date of calculation of Zakat, such liabilities you may deduct before arriving at the net wealth. NOTE: Payment of Income Tax or Sales Tax does not fulfil your liability towards Zakat and you cannot deduct Income Tax payments from your net Zakat. Only tax liability, if due on the date of Zakat calculation is detectable from the nett assets. Zakat is apart from Income Tax and Wealth Tax payments. If you feel that certain I.T. demands are is disputed, unpaid and are pending in appeals, you may deduct the entire outstanding tax liability. But if the tax liability is reduced in appeal or otherwise in future you have to pay Zakat on such saving for all the years you have not paid Zakat....

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Zakat on Animals including poultry and fish farming

IX. Zakat on Animals including poultry and fish farming On all grazing animals like goats, sheep, camel, cows, broiler chickens, of average size, the Zakat is one animal or bird on every 40 animals or birds. But if the animal is of younger age (say less than 6 months) even one animal out of 100 can be given. There is no Zakat on egg laying birds, or milking animals such as cow, buffalo etc. You can calculate and give cash Zakat in lieu of birds or animal. In case of broiler chickens you can make your own judgement and calculate Zakat as there are no fixed forms. Zakat for Goats/Sheep/Birds Etc. For 40 to 120 goats/sheep/birds : One goat/sheep/birds of a year or more old. For 121 to 200 goats/sheep/birds : Two goats/sheep/birds of a year or more old. Zakat for Cows/Buffaloes For...

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akat on Agricultural produce

VIII. Zakat on Agricultural produce Zakat is payable on all agricultural produce including fruits, commercially grown flowers, vegetables and all types of grains at the time of harvest itself. The passing of one year does not apply for agricultural produce. a) On crops dependent on rain water only, Zakat is payable on 10% of the crop. You can give the produce itself or in kind or the cash value may be given. b) On crops produced with Canal water, tank water or bore well and open well the Zakat is 5% of the crop produced. There is no deduction out of this on any account. c) If land is partly irrigated by rain water, partly by well or canal water you may make your own judgement and calculate Zakat. But the formula or average 7.5% would be fair and reasonable. d) If there are two or...

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Zakat on loans, Government bonds, provident funds, LIC Etc.

VII. Zakat on loans, Government bonds, provident funds, LIC Etc. Zakat is payable on loans advanced by you to your friends and relatives. It should be treated as cash in hand and Zakat is payable on it. You may deduct loans payable by you if any for arriving at the net amount. Zakat is also payable on all Government Bonds such as Indira Vikas Patrika, IDBI Bonds, Units, LIC Paid up Premiums and all such Postal Savings Certificates Etc. Zakat is also payable on Provident Funds, Earnest Money Deposits in case of contractors, Tender Deposits, Government Bills Receivable, Security Deposits etc. Zakat on Company shares and mutual fund. You should pay Zakat on investment in Company Shares calculated at quoted value on the date of Zakat calculation. If the share of your company is...

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Zakat on Cash and Bank Balances

VI. Zakat on Cash and Bank Balances Zakat is payable on all cash balances and bank balances in form of balance in savings account, current account or fixed deposits including monthly income certificate or term deposits. The amount should be in the bank for one year. If the amount is utilised for personal or any other use at the time of calculation of Zakat, only on the balance of the amount Zakat is payable. But if the amount has been withdrawn and is lying as cash in hand you should pay Zakat on both Bank and Cash balances added together. Usually it happens that the balance keeps on changing as per personal requirements. You may pay Zakat only on the remaining amount on the date of calculation....

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Zakat on business stock:-

IV. Zakat on business stock:- No matter what your business is you have to pay Zakat on all Stock in Trade. The stock must be valued at Cost price (Purchase Price Plus Transport, Insurance etc). If you have any bills receivable from your customers you must add the same. The following amounts are detectable from the above a) All amounts due to your suppliers. b) All loans on stock on the date of calculation. Dead stock should also be taken into account at the discount rate (i.e. if sold in the open market by way of discount sale etc). You should not calculate dead stock at Purchase Rate or Cost Price. Damaged stock need not be calculated at Cost Price but at scrap value. Pay Zakat on your net stocks as per above calculations. Zakat is payable on all business stock including old parts,...

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Zakat on Landed property

III. Zakat on Landed property Zakat is not payable on the following properties.  a) Personal residential houses even if they are more in number meant for residential purposes only. b) Property given on rent irrespective of the number c) Agricultural land, if meant for agricultural and farm house (if any) on agricultural land, servant quarters, godowns, tractors, bullocks and all implements for use at the farm. d) Open land owned with the intention of building a house in future for self or for the benefit of the family. Zakat is payable on the properties held with an intention to sell at a future date for a profit or as an investment. However, if your intention on holding the properties changes in the current year i.e. from self use to business purpose, be honest to Allah and pay...

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Zakat on pure silver, silver jewellery, House hold items etc

II. Zakat on pure silver, silver jewellery, House hold items etc. Zakat is payable on silver in pure form or in the form of jewellery utensils, decorative items and all household items including crockery, cutlery made of silver at the prevailing market rates. For arriving at the value of utensils, and household items 10% of the value is to be deducted as it is not pure silver. Zakat on Jewellery should be paid by the owner of the jewellery. If a woman is the owner of the jewellery and she has no liquid cash, her husband, son or father can also pay the Zakat on her behalf. But if they are also not paying, then the owner should sell part of the jewellery and pay Zakat. If the jewellery is held by two or more persons jointly, then the individual should calculate on his/her share out...

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Zakat on Pure Gold and Gold Jewellery

I. Zakat on Pure Gold and Gold Jewellery Zakat should be calculated on Pure Gold and jewellery at a value as on the date of Valuation. There are different opinions on the value to be adopted for valuation (i.e.) Purchase price or Market price. Most of the Ulema have favoured Market value prevailing as on date of valuation of Zakat and not the Purchase price. A deduction of 2% from the weight of Jewellery is allowed towards studded stones as Zakat is not payable on any kind of stones including diamonds, rubies, emeralds, pearls etc. If there are rows of pearls or any other beads you have to make a rough estimate and deduct from the total weight of the article. You may deduct 4 grams from the total weight of the jewellery item if there is a dory (thread for tying at the back). For...

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