What is the Ruling in relation to paying Zakat on Shares, Funds, Money Market, Bonds.
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What is the Ruling in relation to paying Zakat on Shares, Funds, Money Market, Bonds, Stocks, Unit Trusts known that such Investments were bought for their Income not for ongoing Trading.
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Determination of zakah
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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 ones assets (properties, investments, jewelry, cash, etc.) except:
- the value of the house one owns and actually lives in
- the value of the car/vehicle one uses on a regular basis
- the value of the furniture and fixtures one uses on a regular basis.
Your Question: What is the Ruling in relation to paying Zakat on Shares, Funds, Money Market, Bonds, Stocks, Unit Trusts known that such Investments were bought for their Income not for ongoing Trading.
Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:
That they took riba, although they were forbidden. And that they devoured mens substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!
Allah Says in the Holy Quran Chapter 3 Surah Ale-Imraan verses 130-132:
130 O ye who believe! Devour not riba doubled and multiplied; but fear Allah; that ye may (really) prosper.
131 Fear the Fire which is prepared for those who reject faith.
132 And obey Allah and the Messenger; that ye may obtain mercy.
Allah Says in the Holy Quran Chapter 30 Surah Rome verse 39:
39 That which ye lay out for riba through the property of (other) people will have no increase with Allah: but that which ye lay out for charity seeking the Countenance of Allah (will increase): it is these who will get a recompense multiplied.
Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 276:
276 Allah will deprive riba of all blessings, but He will give increase for deeds of charity: for He loves not creatures ungrateful and wicked.
Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:
O Believers!, fear Allah and give up that riba which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!
Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib
Ali said he heard Allah's Messenger (saws) invoke the curse of Allah on those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.
First and foremost, we assume that these investment in shares, funds, money market bonds, stocks, unit trusts, etc. are all within the Shariah-compliant interest-free principles.for to derive any income from riba or interest is categorically forbidden, unlawful, and absolutely haraam for the believers who sincerely fear Allah and the Last Day.
All of ones investments, regardless of whether they were bought with the intention to derive income or for trading, etc..all of them could constitute ones assets; and if these assets have been in ones possession for a period of one calendar year, one would be liable to fulfill their annual zakah on their net excess assets at the rate of 2.50%.
Whatever written of Truth and benefit is only due to Allahs 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,