I have one confusion regarding to pay zakat on excess asset
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:
I have one confusion regarding to pay zakat on excess asset held for 1 year. For example I got bonus from the company say 100,000 Rs on jan.1,
I purchased gold in May Rs 50,000. In jan next year I have cash balance 150,000 of which 50,000 from bonus last year and remaining amount Rs 100,000 recieved from various source only 3 month old plus Gold which i bought in May.
For Zakat, should I take bank balance of Rs 150,000 and gold value bought in May or to consider excess asset which is 1 year old i.e cash of Rs 50,000 only and defer zakat for remaining asset i.e cash Rs 100,000 and gold. Please advise in the light of shariah.
Jazak Allah Khair.
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Zakah on excess wealth
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In principle, Zakah is only due on ones excess saved wealth which has been in ones possession for a period of one calendar year.
Firstly, as you were able to save Rs. 50,000.00 from the Rs. 100,000.00 bonus you received last year, and this Rs. 50,000 has been in your possession for a full calendar year, the zakah would be liable on only the Rs. 50,000.00 at a rate of 2.5%.
Because the other Rs. 100,000.00 you collected from other sources has only been in your possession for only 3 months, there is presently no zakah due on it; zakah would only be due on whatever you are able to save from this amount at the end of the calendar year.
Regarding the gold you bought in May for Rs. 50,000.00, the zakah would be due on it now; as the money that was used to buy the gold was from the Rs. 100,000.00 bonus you received at the beginning of the calendar year; thus because the wealth of Rs. 50,000, regardless of whether you left it in cash or bought gold with it, forms part of your excess saved wealth and has been in your possession for a period of one calendar year, its zakah would be due now at the rate of 2.5%.
The only zakah payment that will differed is the Rs. 100,000.00 which you collected from various sources and has been in your possession for a period of only 3 months; its zakah will be due only when a full year of possession has been completed.
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Your brother and well wisher in Islam,