Zakah calculation

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 AM TOTALLY LOST MY BUSINESS, THEREAFTER I SOLD MY HOUSE FOR 50 LACS,  AND INVESTED IN MY BUSINESS 40 LACS AND FOR 10 LACS I HV PAID A SECURITY DEPOSIT FOR A HOUSE AND PAYING RENT 2500 PER MONTH. PLEASE TELL ME HOW MUCH ZAKAT SHALL I PAY?  (I HAVE TO PURCHASE THE FLAT AGAIN WHENEVER I GET SUFFICIENT MONEY FROM MY BUSINESS.)

(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 calculation

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.

We assume that the total wealth that is left with you now is the 50 lacs which you got after selling your house, and you have no liabilities or debts. If you do have any liabilities or debts, you are to deduct that amount from your wealth of 50 lacs.

Ref: the 40 lacs invested in the new business

If you bought ‘merchandise’ or ‘goods for trade’ with the full 40 lacs, then you would be liable to pay 2.50% zakah on the full 40 lacs.

But in case you spent (lets say) 10 lacs on the furniture and fixtures to decorate the shop, and the balance 30 lacs were spent on buying the ‘merchandise’ for trade, then you are liable to pay zakah only on the 30 lacs….for there is no ‘zakah’ liable on furniture, fixtures, tools used in the business.

Ref: the 10 lacs you gave as security deposit.

This 10 lacs is your wealth and you will be liable to pay annual zakah of 2.50% on the full 10 lacs.

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