I purchased a plot last month for IRS850,000.00 in India but I hv borowed IRS270,000.00 loan against mortgaging jewellery to purchase the plot
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One of our brothers/sisters has asked this question:
I purchased a plot last month for IRS850,000.00 in India but I hv borowed IRS270,000.00 loan against mortgaging jewellery to purchase the plot, so on which amount i hv to pay zakat & is it now itself or after one year. Also i hd invested in my 2 childrn names bonds from UTI which mature after another 4yrs & its todays total value is IRS240,000.00, hv i to pay for zakat on this too. please be kind enough to reply all above.
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Every believer, regardless of whether man, woman, or child, who has excess wealth (over the nisaab which is appx US$1,000.00) of their own, is liable to pay a 2.5% annual zakat of their nett excess wealth in Shariah.
Zakat is not determined from ones earnings, but rather on ones net excess wealth which is left over after paying all their expenses, and it has been in their possession for a period of one calendar year. There is no zakah liable on the house one lives in, or the furniture and fixture one uses in their house, or the car one drives, etc. But if one has property which one has bought as an investment, or spare vehicles other the one one drives, or jewelry, or any other excess assetthen zakah would be liable on these excess wealth and property.
Any asset, or wealth, or cash, or savings, which are left over after all of ones expenses are paid, and that excess savings and wealth has been in their possession for one full calendar year is liable for payment of annual zakat at 2.5% of its value.
Your Question: I
purchased a plot last month for IRS850,000.00 in
Beloved brother, assuming that what you listed is all your total assets, then zakah would be calculated as follows:
- Current market value of the plot purchased = 850,000.00
- Borrowed loan or debt = 270,000.00
- Jewelry which has been kept now as mortgage for the loan = 300,000.00
- The amount which you have so far invested in the bonds = 240,000.00
Assuming that the above are your total assets and your total borrowings, the determination of zakah would be as follows:
- 850,000 (plot) + 300,000 (the jewelry you own but kept as mortgage) + 240,000 (the amount you have so far invested in the bonds) = INR 1,390,000.00 Total Assets
- 270,000.00 loan or Total Liabilities
Thus your Total Nett Assets would be: (Total Assets) INR 1,390,000.00 (-minus) INR 270,000 (Total Liabilities) = INR 1,120,000.00 Total Nett Assets
Assuming that your assets have been in your possession for a period of one full calendar year your zakah would be determined as: 2.5% of INR 1,120,000.00 or INR 28,000.00 for the current year.
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