Pay zakah on invested amount.

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:

ASSALAMUALAIKUM

 

I HAVE INVESTED SOME AMOUNT IN A CONSTRUCTION COMPANY. PLEASE ADVISE IF I AM SUPPOSED TO PAY ZAKAT ON THIS INVESTMENT. PLEASE NOTE THAT LATER ON I HAD TO BORROW AN EQUIVALENT AMOUNT FROM MY RELATIVES DUE TO MY NECESSITIES SINCE I CANNOT WITHDRAW THE INVESTTED AMOUNT IN BETWEEN.

 

AWAITING YOUR URGENT REPLY.

 

(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:

 

Pay zakah on invested amount

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.

 

If the total net worth of any believer (man, woman, or child) is more than the prescribed ‘nisaab’ of 7.5 ‘tolas’ of gold (app. 85 grams or app. Value US$2,100.00), then the person is liable to pay the obligatory annual ‘zakah’ of 2.5% on their excess wealth which has been in their possession for a full calendar year.

 

If the total net worth of any believer is less than the prescribed ‘nisaab’, he/she is not liable to pay any ‘zakah’ until their net worth exceeds the prescribed ‘nisaab’.

 

For the purpose of determining ‘zakah’, the ‘Net Excess Assets’ would be the current market value of all of one’s assets (properties, investments, 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: I HAVE INVESTED SOME AMOUNT IN A CONSTRUCTION COMPANY. PLEASE ADVISE IF I AM SUPPOSED TO PAY ZAKAT ON THIS INVESTMENT

If you have invested a certain amount in a business, that amount will be considered amongst your excess assets, and provided that amount has been in your possession for one full lunar calendar year, indeed you would be liable to pay 2.50% of the market value of your investment as ‘zakah’ for the year.

 

Your Question: ….PLEASE NOTE THAT LATER ON I HAD TO BORROW AN EQUIVALENT AMOUNT FROM MY RELATIVES DUE TO MY NECESSITIES SINCE I CANNOT WITHDRAW THE INVESTTED AMOUNT IN BETWEEN.

The amount that you subsequently borrowed will not effect the eligibility of your paying the zakah on your excess assets…..the amount that you borrowed inherently belongs to the person who lent you the funds, and it is they who would be liable to pay the zakah for their funds.

 

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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