I want to know what is meaning NETT EXCESS ASSETS.

Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

 

One of our brothers/sisters has asked this question:

Assalam alaikum,

Al hamdulliah, I have an opportunity to get your valuable e-mail regarding Zakath.

 

I have a pretty doubts, pls clarify if possible.

 

All Assets (except the house one lives in, vehicle one uses, etc.) minus all loans = Nett Excess Assets. It is on the market value of these Nett Excess Assets upon which the annual zakah of 2.5% is due.

 

I want to know what is meaning NETT EXCESS ASSETS.

 

Suppose I have two shops and getting monthly rent of 4,200 each.

So, I should be zakath for Rs 8,400 x 12 month = Approx. 1 lack = 2,500 Rs Zakath.

 

Not for the value of shops which I purchased long time ago.

 

Pls re-confirm.

 

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

 

Answer:

 

Zakah calculations

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

 

Your Question: I want to know what is meaning NETT EXCESS ASSETS.

For the purpose of determining ‘zakah’, the ‘Net Excess Assets’ would be the current market value of all of one’s assets (properties, jewelry, cash, etc.) except:

  1. the value of the house one owns and actually lives in
  2. the value of the car/vehicle one uses on a regular basis
  3. the value of the furniture and fixtures one uses on a regular basis.

 

Your Question: Suppose I have two shops and getting monthly rent of 4,200 each.

So, I should be zakath for Rs 8,400 x 12 month = Approx. 1 lack = 2,500 Rs Zakath.

Not for the value of shops which I purchased long time ago.

The monthly rent or revenues one receives from the shops or business one owns is absolutely irrelevant when determining ‘zakah’.

 

Lets say the only assets you own are two shops which you bought a long time ago for US$1,000.00 each and the current market value of each shop today is US$5,000.00.  Irrespective of how much rent these shop generate, you will be liable to pay ‘zakah’ on the current market value of your owned properties at the rate of 2.50%. 

 

Thus two shops current value US$5,000 each = US$10,000.00; thus your annual ‘zakah’ for this year would be 2.50% or US$250.00. 

 

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone.  Allah Alone Knows Best and He is the Only Source of Strength.

 

Your brother and well wisher in Islam,

 

 

Burhan

 

 

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